Why BYD Intends to Open Automobile Assembly Factory in Cambodia?

History of BYD Company in Cambodia

BYD, a publicly listed Chinese multinational manufacturing company, has been making waves in the global automobile industry, particularly in the electric vehicle (EV) sector. The company, founded in 1995, initially focused on rechargeable batteries, which laid the groundwork for its foray into the automotive market. BYD’s presence in Cambodia, though not as deeply rooted as in other regions, has seen significant developments over the past few years. BYD entered the Cambodian market with its electric buses and vehicles, aiming to introduce sustainable transportation solutions. Their efforts align with Cambodia’s increasing focus on green energy and sustainable development. Over time, BYD’s commitment to innovation and quality has earned it a reputation as a leader in the EV market. The company’s vehicles, known for their advanced technology and environmental benefits, have started to gain traction among Cambodian consumers and businesses alike. As Cambodia continues to develop its infrastructure and embrace modern technologies, BYD’s expansion into the local market signals a promising future for the company and the country’s automotive industry.

Recent Update

China’s BYD is leading the way in Cambodia’s emerging electric vehicle (EV) market. In the first half of 2024, BYD sold 658 cars in Cambodia, representing over 40 percent of the 1,614 EVs sold in the country during that period.

According to the Ministry of Public Works and Transport (MPWT), in the first six months of 2024, a total of 2,968 electric vehicles were officially registered in Cambodia. This number includes 914 motorcycles, 440 tricycles, and 1,614 cars.

Japan’s Toyota sold 261 EVs, while the US-based Tesla sold 186, with other brands accounting for the remaining sales, according to a recent report.

The MPWT noted that the demand for electric vehicles is steadily increasing in Cambodia. “We see daily registrations of EVs, with more people showing optimism and interest in electric vehicles, marking a new trend,” the ministry stated.

Electric vehicles offer several advantages, including low daily operational costs and reduced pollution levels, with some automakers claiming zero emissions. The Royal Government of Cambodia, in collaboration with the MPWT and other relevant ministries and institutions, is working to expand the number of charging stations across the country.

Cambodia aims to have over one million electric two- and three-wheelers on its roads between 2030 and 2040, and about 100,000 electric cars between 2035 and 2042, according to the recently released Electric Vehicle (EV) Roadmap for Charging Stations by MPWT.

The ministry outlines three scenarios for EV adoption by 2050. Scenario One is the most conservative, Scenario Two is the most likely, and Scenario Three is the most aspirational.

All three scenarios predict that Cambodia will have over a million two- and three-wheeler electric vehicles between 2030 and 2040, with the number growing to between 2.1 million and 7.3 million units by 2050.

In Cambodia, adopting electric vehicles can significantly reduce fuel expenses, saving users an average of $133 annually for electric motorcycles and $1,069 for electric cars. These savings could collectively amount to between $14 million and $78 million per year by 2030, and between $509 million and $1.76 billion annually by 2050. To support the growing number of electric vehicles, the country will need extensive charging infrastructure, requiring between 9,900 and 33,800 charging points by 2050, with an investment ranging from $168 million to $576 million. Additionally, Cambodia will need battery disposal facilities. By 2040, several hundred MWh of batteries will need to be repurposed for secondary applications, and by 2050, between 0.7 GWh and 2.5 GWh will be decommissioned annually for secondary uses, while between 0.3 GWh and 1.4 GWh will need to be recycled, meeting six to nine percent of the demand for new batteries.

Ministry of Public Works and Transport (MPWT)

BYD has recently announced its intention to open an automobile assembly plant in Cambodia. This exciting news was shared by Cambodian Prime Minister Samdech Moha Borvor Thipadei Hun Manet during a get-together and solidarity dinner with Cambodian small and medium enterprises and handicrafts in Phnom Penh on June 27, coinciding with the First National Day of Micro, Small and Medium Enterprises. The Prime Minister emphasized that BYD’s entry into Cambodia is a positive development for the nation, adding to the existing automobile assembly plants of prominent brands like Ford, Toyota, and others.

In his speech, Samdech Thipadei Hun Manet highlighted the significance of this development for Cambodia’s industrial sector and encouraged private sector entities, particularly micro, small, and medium enterprises, to collaborate closely with the Royal Government in achieving the country’s development goals. Currently, Cambodia boasts six automobile assembly plants: Daehan Auto, which manufactures Ssangyong vehicles; RMA Automotive, producing Ford cars; Camko Motor, making Hyundai vehicles; HGB Motors Assembly, manufacturing Kia cars; GTV Motor, producing local brand cars under the GTV label; and Toyota Tsusho Manufacturing (Cambodia), which produces Fortuner and Hilux models.

The Cambodian automotive market has seen substantial growth, with vehicle imports totaling approximately US$385 million from January to May 2024. This trend underscores the growing demand for vehicles in the country and presents a lucrative opportunity for BYD to tap into the market with its electric vehicles.

Top 7 Reasons Why BYD Company in Cambodia Could Potentially Supply the Leading Electric Vehicle (EV) in Cambodia

1. Growing Demand for EVs

As global awareness of climate change and environmental sustainability increases, there is a rising demand for electric vehicles. In Cambodia, the government and consumers are becoming more conscious of the benefits of EVs, such as reduced emissions and lower fuel costs. BYD, with its extensive experience and innovative technology, is well-positioned to meet this growing demand.

2. Supportive Government Policies

The Cambodian government has shown a commitment to promoting green energy and sustainable transportation solutions. Policies and incentives supporting the adoption of EVs and the development of related infrastructure make Cambodia an attractive market for BYD. The establishment of an assembly plant aligns with these policies, fostering local manufacturing and reducing import dependency.

3. Strategic Location

Cambodia’s strategic location in Southeast Asia provides a gateway to other regional markets. By establishing a manufacturing base in Cambodia, BYD can efficiently serve not only the local market but also neighboring countries. This regional presence enhances BYD’s competitive edge and logistical efficiency.

4. Skilled Workforce and Cost Advantages

Cambodia offers a cost-competitive environment for manufacturing operations. The availability of a skilled workforce at relatively lower labor costs compared to other countries in the region presents a significant advantage for BYD. This cost efficiency can translate into competitive pricing for BYD’s vehicles in the market.

5. Rising Middle Class

The growing middle class in Cambodia is driving demand for modern, reliable, and affordable transportation options. As incomes rise, consumers are increasingly looking for vehicles that offer value for money. BYD’s range of electric vehicles, known for their affordability and advanced features, is well-suited to meet the needs of this emerging consumer base.

6. Technological Leadership

BYD is a global leader in battery technology and electric vehicle manufacturing. Their continuous investment in research and development ensures that their vehicles are equipped with the latest advancements in EV technology. This technological leadership positions BYD as a frontrunner in the Cambodian EV market, offering consumers cutting-edge solutions.

7. Environmental Benefits and Social Impact

Electric vehicles contribute to reduced greenhouse gas emissions and lower levels of air pollution, leading to improved public health and environmental sustainability. BYD’s presence in Cambodia can significantly contribute to the country’s green initiatives, supporting the government’s goals of reducing carbon footprints and enhancing the quality of life for its citizens.

Conclusion

BYD’s intention to open an automobile assembly factory in Cambodia marks a significant milestone in the country’s journey towards industrialization and sustainable development. The combination of a supportive government, strategic location, cost advantages, and a growing demand for electric vehicles creates a conducive environment for BYD’s success. As the Cambodian automotive market continues to evolve, BYD’s innovative and eco-friendly vehicles are poised to become a leading choice for consumers. The collaboration between BYD and the Cambodian government not only promises economic growth but also underscores a shared commitment to environmental sustainability.

We would love to hear your thoughts on BYD’s plan to open an automobile assembly factory in Cambodia. Do you think this move will significantly impact the local automotive market and environment? Share your opinions and join the discussion in the comments below!