As the world pivots toward sustainable and eco-friendly technologies, Cambodia has stepped onto the global stage with its ambitious National Policy on the Development of Electric Vehicles (EVs) for 2024–2030. Adopted on May 29, 2024, this groundbreaking policy marks a decisive move by the Royal Government of Cambodia to promote green mobility, reduce environmental pollution, and foster economic efficiency.

Current Progress and Future Prospects

As of June 2024, the government has registered 1,614 electric cars, 914 electric scooters, and 440 three-wheeler electric vehicles. Twenty-one EV charging stations are operational, signaling progress in building the infrastructure necessary for sustained EV growth.

Looking ahead, Cambodia’s commitment to green mobility promises to reshape the country’s transportation landscape, positioning it as a leader in Southeast Asia’s sustainable development movement.

A Vision for the Future of Mobility

The policy sets forth bold objectives, including:

• Expanding EV Adoption: By 2030, Cambodia aims to have 30,000 electric cars, 720,000 electric scooters, and 20,000 three-wheeler electric vehicles traversing its roads.
• Strengthening Infrastructure: To support the projected increase in EVs, the government plans to establish a robust network of EV charging stations nationwide.
• Economic and Environmental Benefits: The policy highlights the dual benefits of reducing operational costs for vehicle owners and curbing carbon emissions.

With these targets, Cambodia seeks to align with global efforts toward decarbonizing the transportation sector while simultaneously creating economic opportunities.

Economic Impacts: Driving Savings and Investments

The financial benefits of EV adoption are clear. Driving an EV in Cambodia costs approximately 9,633 riel ($2.35) per 100 kilometers, significantly lower than the 35,723 riel ($8.71) required for petrol or diesel vehicles. This cost-efficiency not only saves money for individuals and businesses but also creates an attractive incentive for early adopters.

Additionally, the policy includes reduced import duties on EVs, approximately 50% lower than those for traditional vehicles. Introduced in 2021, this measure has made EVs more accessible to Cambodian consumers, catalyzing their adoption across the country.

Environmental and Social Implications

Transportation remains a significant contributor to air pollution, and the shift to EVs represents a critical strategy to reduce greenhouse gas emissions. By embracing electric mobility, Cambodia is taking proactive steps to improve air quality and mitigate the effects of climate change. Moreover, the policy underscores the importance of fostering green industries and creating jobs in the renewable energy and EV manufacturing sectors.

Energy Security: A Key Priority

An often-overlooked yet critical aspect of Cambodia’s EV policy is its emphasis on enhancing energy security. By transitioning to electric vehicles, the country aims to reduce its dependence on imported fossil fuels, which currently account for a significant portion of its energy consumption. The shift to EVs aligns with efforts to diversify energy sources, particularly through the integration of locally produced renewable energy. This not only strengthens Cambodia’s energy independence but also stabilizes energy costs in the long term, providing a more resilient framework for sustainable development.

Mechanisms for Policy Implementation

To ensure the successful execution of its EV policy, the government has identified three key mechanisms:

1. Encouraging the Use of EVs: This involves raising public awareness, providing incentives, and improving access to EVs for individuals and businesses.
2. Increasing Supply: The government plans to support EV imports, establish local manufacturing capabilities, and enhance the availability of EV charging stations.
3. Environmental Protection: Measures will include promoting the use of renewable energy to power EVs and ensuring proper disposal and recycling of EV batteries to minimize environmental impacts.

Addressing Potential Risks

The policy also acknowledges several risks that could arise during the transition to electric mobility:

1. Risk of New Technologies and Energy Sources: Emerging technologies like hydrogen-powered vehicles may present competition, requiring Cambodia to adapt its strategies to remain relevant.
2. Risk of Reduced Tax Revenue: As EVs replace traditional vehicles, the government may experience a decline in tax income from fuel sales and conventional vehicle registrations.
3. Environmental Risk from Battery Residues: Long-term environmental concerns related to the disposal and recycling of EV batteries must be addressed to prevent ecological damage.
4. Risk of Becoming a Dumping Ground: The policy highlights the need to prevent Cambodia from becoming a destination for outdated fossil fuel vehicles phased out in other countries.

By proactively addressing these risks, the government seeks to build a sustainable and resilient EV ecosystem.

Regulatory Implications

The adoption of EV policies introduces significant regulatory implications for various stakeholders. Key considerations include:

• Standards for EV Manufacturing and Imports: The government would need to develop technical standards for the production and importation of EVs to ensure safety, quality, and environmental compliance.
• Infrastructure and Land Use Regulations: Building a nationwide charging network requires clear guidelines on land allocation, zoning, and permits for installing charging stations.
• Tax Incentives and Compliance: While reduced import duties are already in place, additional fiscal measures such as tax credits for EV buyers or subsidies for manufacturers could be considered and may need regulation to ensure transparency and effectiveness.
• Environmental Laws: Regulations will need to address the recycling and disposal of EV batteries to prevent environmental hazards, aligning with global best practices.
• Energy Policies: The integration of EVs into the national grid requires policies for energy distribution, grid upgrades, and the promotion of renewable energy sources to power EVs sustainably.

These regulatory frameworks will require close coordination between the government, private sector, and international partners to ensure a seamless transition to electric mobility while addressing legal and operational challenges.

Challenges to Overcome

Despite its ambitious vision, the policy faces challenges, including the need for:

• Comprehensive public awareness campaigns to promote EV adoption.
• Investment in localized EV production to reduce reliance on imports.
• Collaboration with private sectors and international partners to ensure the policy’s success.

Conclusion

Cambodia’s National Policy on the Development of Electric Vehicles is a bold and timely initiative, reflecting the country’s commitment to sustainability, economic diversification, and technological innovation. By fostering a greener, cleaner future, the policy not only advances Cambodia’s environmental goals but also sets a compelling example for the region.

As Cambodia accelerates toward a greener tomorrow, this policy serves as a beacon of hope and progress, inviting stakeholders from all sectors to join hands in driving this transformative journey forward.

At Sok Siphana & Associates, we are dedicated to supporting investments and innovations in Cambodia’s burgeoning EV sector. Our legal experts stand ready to assist stakeholders in navigating the regulatory landscape, securing compliance, and capitalizing on the opportunities presented by this landmark policy. Together, let’s drive Cambodia’s sustainable future forward.