On July 15, Cambodian Prime Minister Hun Manet announced on his X account that he had met with Liu Xueliang, CEO of BYD’s Asia Pacific Automotive Sales Division, stating that the company would establish a 20,000-unit capacity manufacturing plant in the country. Following an earlier announcement by Hun on June 27 at a small and medium-sized enterprise day in Phnom Penh, BYD committed to opening a manufacturing plant in Cambodia in the near future.
Cambodia announces new plant, following BYD’s expansion into Vietnam which encountered challenges. By May 2023, Vietnamese officials announced that BYD would establish a factory in Phu Tho province to manufacture electric vehicles; although, it is rumored that this project has been put on hold to prioritize the construction of a similar facility in Indonesia instead.
While considering the suitability of the stories, a sudden shift from Vietnam to Cambodia seems incongruous without further context or justification. For the first time in history, Cambodia recorded gross sales of electric vehicles in 2020, with a modest total of just five units sold. By 2021, the figure had risen to 63, preceding a peak of 663 achieved in 2022; however, gross sales then declined to 604 in the subsequent year. The dataset encompasses a broad spectrum of electric vehicles, including not only four-wheeled cars but also those with two and three wheels.
As of February 2023, a total of 1,887 electric vehicles were registered in Cambodia, with 906 being four-wheelers. The public charging infrastructure now boasts a total of eighteen charging stations.
The “Electrical Vehicle Improvement Coverage” forecast predicts that four-wheeled electric vehicles will increase to 30,000 by 2030, with 25,000 of these being cars.
Chinese media outlets enthusiastically tout Cambodia’s growth prospects, citing remarks from various Cambodian officials. Solar Chanthol, Cambodia’s Deputy Prime Minister, confided to BYD’s vice president in October 2023, “We will unlock the vast potential of the Higher Mekong Subregion (GMS), comprising six countries including Vietnam, Laos, Cambodia, Myanmar, and Thailand.” It seemed Solar was overlooking the fact that BYD has already established a plant in Thailand with a capacity of 150,000 units and is building another in Indonesia. The company plans to launch its Indonesian manufacturing facility in early 2026, with an initial production capacity of 150,000 vehicles.
With a limited domestic market in Cambodia and more competitive production facilities elsewhere for export, the outlook for the local manufacturing plant appears bleak?
In 2023, Cambodia saw a total of 33,683 vehicles sold, according to data from Focus2Move, a leading market research company. This represents a virtually 11 percent year-over-year improvement. Cambodia currently hosts six automobile exhibitions. According to reports, in his June address, Hun Manet revealed that automotive giants Ford, Toyota, and Hyundai have decided to establish automobile production facilities in Cambodia.
In 2020, BYD made its foray into the Cambodian market, marking a significant milestone; since then, the company has expanded its presence with the opening of two new outlets in Phnom Penh within the past 12 months? Ten global companies are currently marketing electric vehicles in Cambodia, comprising leading brands like BMW, Tesla, and Toyota, as well as Chinese firms Hongqi, Wuling, GAC Aion, and BYD.
Despite BYD’s challenges, the company successfully implemented market strategies, ultimately delivering 658 electric vehicles in the first half of 2024, representing more than 40% of the overall 1,614 electric cars sold during that period.
In contrast to Vietnam, where a staggering 404,294 vehicles were sold last year alone, the proposed plan for Cambodia remains shrouded in mystery. By 2023, electric vehicles (EVs) have already accounted for approximately 6% of total gross sales, with BMI Analysis predicting a robust compound annual growth rate of 26% through to 2032. This projected growth is expected to result in an estimated market size of around 65,000 automobiles per annum by the end of that decade.
Editor’s word:
It is well-known that BYD has not publicly disclosed plans for a Cambodian plant. Until more definitive details emerge, we maintain a healthy dose of skepticism regarding the feasibility of bringing the project to fruition.
A lingering concern surrounding this comprehensive strategy is the fact that Cambodia is notorious for having some of the region’s highest electricity prices, both for residential and commercial consumers. The country grapples with inadequate power generation capabilities, resulting in a persistent shortage of electricity to meet consumer needs, compounded by weaknesses in its transmission infrastructure that hinder efficient distribution.
While Vietnam may hold an advantage over Cambodia in terms of market measurement, progress projection, and infrastructure, making it a more suitable location for a BYD manufacturing facility.
Sources: X, Khmer Occasions, Finance-Related Press, Yiche, Pandas go to Sea, Focus2Move
