Govt asks investors to build EV production plants
Govt asks investors to build EV production plants
The Ministry of Commerce (MoC) encouraged investors and businessmen to invest in car factories, especially the electric vehicles (EVs) and reap benefits from the FTAs that Cambodia has with many partners and the preferential tariffs received from developed countries.
The announcement was made on Saturday during the inauguration ceremony of the ‘First Auto Show 2024’ which was presided over by Hun Many, Deputy Prime Minister and Minister of Civil Service (MCS) and Cham Nimul, Minister of MoC at The Premier Center Sen Sok in Phnom Penh.
Addressing the ceremony, Many underlined the importance of the private sector in organising the exhibition that will boost the connection between the public and the private sector.
The Deputy Prime Minister hoped to see more such events to showcase the diversity and development of the automotive sector as it opens the opportunity for car importers to promote their brands and attract more customers.
Appreciating the management of The Premier Center Sen Sok for organising the event, Nimul said such platform demonstrate the innovation and modernity of cars as well as a testament that the automotive market is growing fast in Cambodia.
She encouraged investors to invest in establishing more production bases and car factories, especially in the electric vehicles (EVs) to reap benefits from the FTAs and other the preferential tariffs received from developed countries.
“Besides, we [MoC] also focus on strengthening the protection of intellectual property (IP) to promote honest, fair and competitive businesses in the nation,” Nimul said.
Speaking to Khmer Times Yann Vaudin, Founder of VOLTRA said, “In 2022, Cambodia’s import duty and tax for electric vehicle lithium batteries pack was favourable 35 percent of Customs Duty (CD), 0 percent of Special Tax (ST) and 10 percent of VAT.
The ASEAN-China FTA eliminated 35 percent of CD, leaving only a 10 percent VAT to import battery packs. However, a new 10 percent ST added last year by the Ministry of Economy and Finance (MEF) can’t be removed by FTAs, which wipes out the FTA benefit [10 percent of ST + 10 percent of VAT] while making batteries more expensive, he said.
“This policy reversal undermines the country’s EV goals hence the government must develop a clearer and sustainable EV development strategy.”
Vaudin added that a comprehensive approach is needed, including strict oversight of EV imports by the General Department of Customs and Excise (GDCE) and mandatory registration of all EVs through the Ministry of Public Works and Transport (MPWT).
Natharoun Ngo Son, Country Director of EnergyLab told Khmer Times that EnergyLab supports the government’s goal to attract more investment in EV production and manufacturing, which is also an ambition pursued by Sun Chanthol, Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia (CDC).
“EV assembly lines are already in operation in Cambodia and local market demand for EVs over the coming years will be primarily driven by two and three-wheelers.”
The South Korean EV brand ‘Verywords’ was the first to establish a full two-wheeler assembly line in the country [on National Road 1] as they received the Clean Energy Technology Award during the Cambodia Clean Energy Week 2023.
