Electric cars (EVs) are taking the world by storm – an electric storm. In 2020, according to the International Energy Agency, there were more than 10 million electric cars on the roads – a 43 percent increase over 2019. Quite notably, during a period when overall new car registrations fell becau Contact online >>
Electric cars (EVs) are taking the world by storm – an electric storm. In 2020, according to the International Energy Agency, there were more than 10 million electric cars on the roads – a 43 percent increase over 2019. Quite notably, during a period when overall new car registrations fell because of the pandemic, global electric car sales share rose 70 percent to a record 4.6 percent of all car sales in 2020.
Electric mopeds are also seeing dramatic rises in sales, especially in countries like Cambodia, where the public can rent two-wheeler EV ride-shares at selected places in Phnom Penh. For example, Oyika''s Go2 app allows users to rent electric scooters and leave them on the street for the next person to pick up. An electric tuktuk will soon be plying the streets of Phnom Penh and electric buses will transport people around Siem Reap.
A small but increasing number of EV four-wheelers are already on Cambodian roads. Several companies have opened showrooms in the capital, introducing more than 10 types of EV cars. The two-wheeler market has about nine two-wheeler EV suppliers, and there is one that provide three-wheelers.
There are many reasons for the rapid rise in EV sales, both in Cambodia and worldwide. The cost of battery technologies has sharply declined over the past few years, and therefore the cost of EVs. The emergence of batteries with increased energy density, increased cycles of charging and discharging, and lower charge losses has directly led to an increase in the lifespan and reliability of EVs – thus prompting more confidence among consumers. By 2025, it is expected that the price of a two-wheeler EV will be the same as a traditional motorcycle with a similar performance.
Another factor that may have led to the rapid rise in EV sales around the world is the capping of subsidies. In both Europe and China, no subsidies were provided for vehicles with prices above a certain threshold. According to the International Energy Agency (IEA), this may have caused the average electric car price to fall in these two regions: battery electric vehicles (BEVs) sold in China were 3 percent cheaper in 2020 than in 2019, while plug-in hybrid electric vehicles (PHEVs) in Europe were 8 percent cheaper.
Electric vehicles are considered the technical solution of choice to meet stringent emission standards in many countries. At the November COP26 summit in Glasgow a group of governments, automakers and others signed on to an agreement to transition to 100 percent zero-emission sales of new cars and vans by 2040 globally and by 2035 in "leading markets." Fifteen countries agreed in a separate pledge to work toward 100 percent zero-emission sales of EV trucks and buses by 2040. Cambodia is yet to follow suit.
It is worth noting that EVs are only as sustainable as the source of the electricity from which they are charged. Emissions are obviously zero if charged with electricity from renewables, but not so if they are charged from the electricity grid. A recent study from the International Council for Clean Transportation (ICCT) confirmed that electric cars are still cleaner than internal combustion engines over their lifecycles even when charged from the dirtiest electricity grids. They also have health and environmental benefits through reduced air pollution that would result in public health benefits. Moreover, the operating cost of an EV over one kilometre is almost half to that of traditional internal combustion engine vehicle.
Laying the groundwork for an EV transformation in Cambodia
For good reason, the Government of Cambodia has included EVs in the country''s national transport policy – with a focus on cities. With rapid urbanization, cities offer the perfect environment for EVs: paved roads, dependable sources of electricity and increasingly available charging stations. Cambodia''s Long-Term Strategy for Carbon Neutrality, submitted to the United Nations Framework Convention on Climate Change (UNFCCC) last December, incorporates a commitment to having 40 percent of EV cars and urban buses and 70 percent of electric motorbikes by 2050.
As a first step in that direction, Cambodia reduced import duties on electric vehicles in 2021 to about 50% lower than taxes on traditional internal combustion engine vehicles. This is providing an incentive for people to shift towards electric vehicles.
The Government is further encouraging investments in EV assembling plants in Cambodia. This move has the potential to create more green jobs and investments and help position Cambodia in the emerging global and regional supply chains for EVs.
One of the primary inhibitors of widespread EV adoption worldwide has been the inadequate charging infrastructure. Expanding charging stations across the country could be one of the key drivers towards large scale adoption of EVs. However, more EVs are needed to provide market incentives for companies to invest in more charging stations – a classic chicken-and-egg scenario. Knowing this, the Ministry of Public Works and Transport is encouraging fuel station operators in the country to install EV charging stations at selected locations. It is further developing licensing requirements for those who would like to establish independent charging stations.
UNDP, the European Union, and the Government of Sweden are working through the Cambodia Climate Change Alliance to support the country in developing a roadmap for upscaling and expanding its EV infrastructure. The Alliance is also supporting the Ministry of Public Works and Transport to develop the necessary regulatory framework to encourage the adoption of electric motorbikes and incentivize the private sector to make better use of them – for example, as delivery vehicles.
With rising gas prices due to geopolitical tensions, the time to rethink sustainable transportation and mobility is now. While Cambodia is making significant and impressive strides to encourage the widespread adoption of electric vehicles, a wide range of reforms may be needed before the EV market can reach maturity. A comprehensive study is needed to determine the EV market''s growth potential with priorities for short, medium, and long-term measures. Areas to be considered could include:
As Cambodia diversifies its economy and prepares to graduate from its Least Developed Country status, developing a more sustainable transport infrastructure will be key to its success. The coming years will be exciting ones to shape the transportation sector of the 21st century in line with the Kingdom''s sustainable development objectives. We look forward to working with all interested partners in the public, private and non-profit sectors to maximize the economic, environmental, and social benefits of ensuring sustainable transportation for all.
Figure 1 (see below image): Global Electric car sales 2010-2020 (source: International Energy Agency)
Written by: H.E. Sun Chanthol, Senior Minister of Public Works and Transport Ms. Alissar Chaker, Resident Representative, UNDP Cambodia
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The news that the Chinese EV juggernaut BYD was opening a manufacturing plant in Cambodia was met with some fanfare, they are the leading Electric Vehicle brand globally and made inroads into the developing markets. However, questions remain over when the paint will be built and if Cambodia''s new EV strategy targets are achievable.
According to the Ministry of Public Works and Transport (MPWT), by the end of June 2024, there were 2,968 registered EVs in Cambodia which include 1,614 cars, 440 tuk tuks and 914 motorcycles. At the start of 2024, there were only EV charging stations available at 18 locations across the whole of Cambodia.
Denza was established nearly 15 years ago in 2010 as a joint venture between BYD and Daimler, with each holding a 50 per cent stake at the time, but in 2022, BYD increased its stake in Denza to 90 per cent.
BYD seized the crown in Q4 2023 from Tesla with the most EV sales but the US EV leader regained that title in Q1 2024 and it is expected that theChinese EV giant will beat Tesla in battery EV sales in 2024. In Q2 2024 alone, the Chinese electric car manufacturer sold nearly one million vehicles.
This is part of the Chinese EV manufacturer''s expansion strategy, added Ye Chenghui, regional director of BYD''s Asia Pacific auto sales division, at the opening ceremony.
China continues to hold more than 50 per cent of the market share of global BEV (Battery Electric Vehicle) sales until 2027 and sales are projected to top the combined sales of North America and Europe in 2030, according to Counterpoint.
Cambodia''s Prime Minister Hun Manet announced on July 16, 2024,thatBYD would establish an EV plant in the Kingdom which would assemble 20,000 vehicles a year for the local market, as well as export vehicles for the international markets. No details were announced as to when the plant will be built.
Considering that current estimates place the number of EV vehicles in Cambodia at under 3,000 it''s more than ambitious to sell 20,000 units annually in Cambodia. It''s the kind of rhetoric that needs to be read cautiously when these types of investments are announced.
Depending on the political outcome in the USA, Chinese EV manufacturers might see more resistance in the US markets with tariffs and duties, while in Europe, the new tariff rates for Chinese EVs are forcing them to look to developing markets.
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