Cambodia’s EV industry warns tax loopholes risk local jobs

Cambodia’s automotive leaders have sounded the alarm over the country’s zero‑duty policy on imported electric vehicles, warning it is undermining local assembly and threatening the growth of a domestic supply chain.

At a panel hosted by EuroCham Cambodia on 30 June, Kensuke Tsuchiya, President of Toyota Cambodia, said the current tax regime leaves little incentive for manufacturers to assemble vehicles inside the country. “If Cambodia maintains low taxes on battery‑powered vehicles, companies will continue importing from abroad rather than investing in local assembly,” he explained. Imported EVs already account for more than 20 per cent of the market, a share expected to rise to 30–40 per cent.

The government eliminated duties on EVs and parts from 1 April this year, a move designed to encourage green mobility. But industry figures argue the policy is backfiring. Ngorn Saing, CEO of RMA Cambodia, said the effective tax on imports is around 11 per cent once VAT rebates are factored in, while local production costs hover near 30 per cent. “No one will assemble EVs in this market because of the tax import,” he said, adding that Mazda and Changan are currently the top sellers.

Executives stressed that without protection, Cambodia risks losing the chance to build a local automotive base. Tsuchiya urged the government to set long‑term tax priorities that balance environmental goals with industrial development. Saing warned that without safeguards, “this young baby may die soon if it is not protected properly,” referring to Cambodia’s fledgling EV industry.

The debate comes as Cambodia’s car market shows strong growth potential. Nearly half the population is under 24, and demand for vehicles is expected to surge as incomes rise. Yet the country lags far behind its neighbours: in Thailand one in 50 people buy a new car each year, compared with one in 260 in Cambodia.

Industry leaders say the next five to ten years will be decisive. With 12 assembly plants already operating nationwide, they argue that clear policy support could attract component makers and create export opportunities. Without it, Cambodia risks becoming a market dominated by imports, missing the chance to develop jobs and skills at home.

-2026-07-06