The announcement that BYD Auto will establish an assembly plant in Cambodia by the end of the year has attracted widespread praise from the Kingdom’s businessmen and economists. 

They have pointed out that the presence of China’s largest electric vehicle (EV) manufacturer, BYD, will contribute to Cambodia’s economy at a time when global political stability and economic growth are uncertain.

On February 6, Sun Chanthol, first vice-president of The Council for the Development of Cambodia (CDC), informed the media that a BYD assembly plant will begin operations by the end of 2025, with an annual production capacity of 10,000 vehicles. In the initial phase, the plant will assemble two types of vehicles: fully electric, and hybrid electric and gasoline.

“The company (BYD) has already secured a location in the Sihanoukville Special Economic Zone (SSEZ), and work is underway to prepare the land for construction. By November of this year, we will see BYD vehicles rolling out of a factory in Cambodia,” he said. 

Regarding the choice of location in Sihanoukville, Chanthol noted that the area’s proximity to the Sihanoukville Autonomous Port, the Kingdom’s largest international port, would make it easier for the company to import parts and components.

Lor Vichet, vice-president of the Cambodia Chinese Commerce Association (CCCA), told The Post on February 7 that changes in the global political landscape, particularly the possibility of a trade war between China and the US – which escalated after the inauguration of US President Donald Trump – has led many Chinese companies to shift their investments to Cambodia. 

Many Chinese business owners have noted that there are currently no tariffs on goods produced in Cambodia exported to the US. This makes the Kingdom an ideal location to manufacture goods for export markets like the US.

He added that Cambodia will continue to enjoy export tax exemptions to many countries until it graduates from Least Developed Country (LDC) status in 2029. Currently, even Vietnam faces potential tariffs on goods exported to the U.S.

“I believe the opening of the BYD factory in Cambodia will serve international markets more than meet the domestic demand, as the electric vehicle market in Cambodia is not yet large,” he said.

He also pointed out that Chinese vehicles are not only making inroads in the US market but also in Europe, Canada, and many other countries, which significantly impacts US vehicle exports.

However, Vichet also expressed the need for Cambodia to focus on strengthening the capabilities of its high and medium-level skilled workforce to better respond to the current and future international trade environment.

“To become a more attractive location for foreign investment, especially during times of global political and economic uncertainty, Cambodia must develop transportation infrastructure and skilled labour,” he added.

Hong Vanak, an economist at the Royal Academy of Cambodia, also believed that the arrival of BYD’s vehicle assembly plant will bring significant benefits to Cambodia, including job creation, improved workforce capabilities, tax revenue, an increase in vehicle part manufacturing plants and profits from exports to international markets.

“In addition to all these benefits, Cambodia could also boost its reputation and attract more international companies to invest in the country,” he said.

He explained that the opening of the factory was likely to encourage Cambodians to purchase more EVs, as they might be priced more affordably. People would also have fewer concerns about the availability of parts.

According to the General Department of Customs and Excise, in 2024, Cambodia spent over a billion dollars on imported vehicles, an increase from the almost 903 million of 2023.

Phan Rim, spokesman for the Ministry of Public Works and Transport, recently reported that in 2024, a total of 2,253 new electric personal vehicles were registered, a 620% increase over 2023, when just 313 were registered. Both electric motorcycles and trucks also saw an increase.