Cambodia is poised to become a regional hub for electric vehicle (EV) production as Chinese manufacturer BYD Auto Industry Co., Ltd. prepares to launch a new assembly plant in the Sihanoukville Special Economic Zone by late 2025. With an investment exceeding $30 million (US$30 million), the facility promises to bolster the country’s growing EV market while signaling a broader shift toward sustainable transportation across Southeast Asia.

A Strategic Investment in Cambodia’s Future

The announcement of BYD’s new assembly plant comes at a pivotal moment for Cambodia, where the adoption of electric vehicles has surged dramatically. According to the Ministry of Public Works and Transport, the number of registered EVs in the country skyrocketed by 620% in 2024, with 2,253 vehicles registered compared to just 313 the previous year. Among the most popular brands are BYD, Toyota, and Tesla, with BYD gaining significant traction due to its affordable yet technologically advanced models.

During a meeting on April 10, 2025, between the Council for the Development of Cambodia (CDC) and BYD executives, Sun Chanthol, the CDC’s first vice-president, welcomed the investment as a testament to Cambodia’s burgeoning appeal to international investors. “Once the electric vehicle assembly plant is completed and officially begins operations in the fourth quarter of 2025, the usage rate of BYD vehicles in Cambodia is expected to increase even further” he stated. The plant, set to break ground by the end of April 2025, will have an annual production capacity of 10,000 vehicles, positioning Cambodia as a key player in the regional EV supply chain.

Located in the Sihanoukville Special Economic Zone, the facility benefits from strategic transportation access for importing components and exporting finished vehicles. This choice of location underscores Cambodia’s efforts to transform Sihanoukville into an industrial and economic powerhouse, building on the zone’s reputation for hosting foreign investments with favorable policies and infrastructure.

BYD’s Growing Footprint in Southeast Asia

BYD, a global leader in electric vehicle manufacturing, has been expanding aggressively in Southeast Asia, a region increasingly seen as a frontier for green technology. The company showcased its latest model, the BYD Seal 5, at the 2025 Bangkok International Motor Show on March 24, highlighting its commitment to capturing market share in the region. In Cambodia, BYD recently introduced models like the BYD Sealion 5 and BYD Atto 2, which executives describe as high-quality, fuel-efficient, and competitively priced for local consumers.

The decision to establish an assembly plant in Cambodia follows a broader trend of Chinese automakers investing in Southeast Asian nations to bypass trade barriers and reduce production costs. Thailand, for instance, has already emerged as a hub for EV production, with BYD operating facilities there as well. Cambodia’s lower labor costs and government incentives, facilitated by the CDC as a one-stop service body for investors, make it an attractive addition to BYD’s regional network.

Prime Minister Hun Manet hailed the investment as a major success for the Royal Government’s efforts to attract international capital in June 2024. His administration has prioritized industrial diversification and sustainability, aligning with global trends toward reducing carbon emissions through electric mobility. The BYD plant is expected to create jobs and transfer technological expertise to local workers, further embedding Cambodia in the global EV ecosystem.

Challenges and Opportunities in Cambodia’s EV Market

Despite the optimism surrounding BYD’s investment, Cambodia faces several hurdles in sustaining its EV boom. Infrastructure for electric vehicles, such as charging stations, remains limited, particularly outside urban centers like Phnom Penh and Siem Reap. While the government has pledged to expand charging networks, progress has been slow, potentially dampening consumer confidence in adopting EVs over traditional internal combustion engine vehicles.

Moreover, the affordability of EVs remains a concern for many Cambodians. Although BYD has positioned its models as cost-effective, the upfront cost of electric vehicles can still be prohibitive in a country where per capita income lags behind regional peers like Thailand and Vietnam. Subsidies or financing schemes could play a critical role in bridging this gap, though no concrete policies have been announced as of yet.

On the opportunity side, Cambodia’s EV market growth aligns with broader regional and global trends toward decarbonization. Southeast Asia, with its rapidly growing population and urbanization rates, represents a significant market for sustainable transportation solutions. Governments across the region, including Cambodia, are increasingly aligning their policies with international climate goals, such as those outlined in the Paris Agreement. BYD’s investment could catalyze further interest from other automakers, potentially transforming Cambodia into a manufacturing hub akin to Thailand.

Regional Implications of BYD’s Expansion

BYD’s move into Cambodia has implications beyond the Kingdom’s borders, reflecting a competitive race among Southeast Asian nations to attract green technology investments. Thailand, which hosts multiple BYD facilities and has positioned itself as the “Detroit of Asia” for automotive production, may face increased competition as Cambodia ramps up its capacity. Meanwhile, Vietnam and Indonesia are also courting EV manufacturers with incentives and strategic industrial zones, creating a dynamic regional landscape.

For BYD, Cambodia offers a foothold to penetrate not just the local market but also neighboring countries through trade agreements like the ASEAN Free Trade Area. The Sihanoukville plant’s output could supply demand in Laos, Vietnam, and Thailand, leveraging Cambodia’s geographic centrality in mainland Southeast Asia. If successful, this model of localized production could set a precedent for other global manufacturers eyeing the region.

Analysts also note that BYD’s expansion reflects China’s broader economic strategy in Southeast Asia, where infrastructure and industrial investments often go hand-in-hand with geopolitical influence. While Cambodia has welcomed Chinese investment enthusiastically—evidenced by projects like the Belt and Road Initiative-funded developments in Sihanoukville—there remains a need to balance foreign capital with local economic empowerment to avoid over-reliance on a single partner.

The rise of electric vehicles in Cambodia carries significant environmental promise, particularly in reducing air pollution in urban areas like Phnom Penh, where traffic congestion and vehicle emissions are growing concerns. EVs, powered by renewable energy sources, could contribute to a cleaner future, though Cambodia’s energy mix still relies heavily on fossil fuels. Transitioning the national grid to renewables will be essential to maximizing the environmental benefits of EV adoption.

Socially, the BYD plant is expected to generate employment opportunities, particularly in Sihanoukville, where economic development has been uneven. However, concerns linger about working conditions and wage levels in foreign-owned factories, issues that have historically sparked unrest in Cambodia’s garment sector. Ensuring fair labor practices will be crucial for the government and BYD to maintain public support for such investments.

Looking Ahead: Cambodia’s Role in the EV Revolution

As BYD prepares to break ground on its Sihanoukville plant, the project stands as a symbol of Cambodia’s ambitions to modernize its economy and embrace sustainable technologies. With EV registrations soaring and government support in place, the Kingdom is on track to carve out a niche in the global electric vehicle market. Yet, questions remain about whether infrastructure and policy frameworks can keep pace with this rapid transformation, and how Cambodia will navigate the geopolitical undercurrents of foreign investment.

For now, the anticipation surrounding BYD’s assembly plant offers a glimpse of a greener, more connected future for Cambodia—one where electric vehicles could redefine mobility and economic growth in Southeast Asia.