China’s expansion in the electromobility sector in Uzbekistan

In January, the State Customs Committee of the Republic of Uzbekistan published passenger car imports figures for 2024, revealing that, for the first time, the number of imported electric and hybrid vehicles surpassed that of internal combustion engine (ICE) cars. In 2024, Uzbekistan imported more than 80,000 passenger cars, with a total value of $1.9 billion. This included 32,900 ICE cars (down 36% y/y), more than 24,000 electric cars (up 150% y/y), and nearly 17,500 hybrid cars (up 42% y/y). The average price of imported electric cars fell threefold between 2023 and 2024, from $27,000 to $9,300. Between January and November 2024, more than 80% of imported passenger cars originated from China, with electric vehicles comprising 40% of them.

The Chinese automotive industry is benefiting from Uzbekistan's regulations promoting electromobility. Since 2023, electric and hybrid vehicle imports into the country have been exempt from tariffs. Uzbekistan presents a promising market for China due to its rapidly growing population and its potential as a gateway for further expansion into Central Asia.

Commentary

• Uzbekistan’s regulatory policies have played a crucial role in facilitating the import of electric and hybrid vehicles. President Shavkat Mirziyoyev’s December 2022 decree ’On measures of state support for the organization of the production of electric cars’, acted as a catalyst for this process. Under this policy, electric and hybrid vehicle imports are exempt from excise and customs duties. The government is particularly encouraging electromobility in the well-established taxi sector, granting license fee exemptions for drivers using electric or hybrid vehicles until 2030. Consequently, the number of electric vehicle charging stations has surged from merely three in 2020 to 450 in 2024.
• The dominance of Chinese electric vehicles in Uzbekistan’s electromobility sector is likely to be reinforced by strong local demand. The country’s population has almost doubled since 1991, reaching 37.5 million. A key shift has occurred in public perception of Chinese cars, with ownership increasingly viewed as a prestigious status symbol, while their prices are considered affordable. Furthermore, winter LPG shortages and rising fuel costs are driving demand for alternative energy vehicles. Between late 2023 and late 2024, LPG prices for end consumers increased by 150%. Uzbek drivers have traditionally relied on LPG as their primary fuel.
• The growing presence of Chinese car brands in Uzbekistan’s (and Central Asia’s) automotive market will be driven not only by imports but primarily by local production. In the Jizzakh region (President Mirziyoyev’s home region), a production facility has been established under the BYD Uzbekistan Factory joint venture to manufacture electric and hybrid vehicles and their components. BYD’s 2022 agreement to produce passenger cars outside China – one of the first such deals in its history – highlights its intention to expand into Central Asia. In 2024, the factory produced its first production batch of 10,000 vehicles. During the first phase of the investment (by the end of 2025), the facility aims to manufacture 50,000 vehicles annually. In the second phase, planned for 2026, it is expected to manufacture 200,000 vehicles annually. In the final phase, scheduled for 2027, the planned production output is 500,000 vehicles annually, with a total value of $960 million. The BYD production plant is just one of several Chinese investments in Uzbekistan’s automotive sector in the past three years.
• The establishment of Chinese automotive production in Uzbekistan encourages greater openness to Chinese car imports, strengthening political and economic ties between Tashkent and Beijing. Although this trade relationship exacerbates Uzbekistan’s trade imbalance with China, the Uzbek government highlights job creation driven by Chinese investments. With a population boom underway, Uzbekistan urgently needs to expand its labour market. Therefore, attracting industrial investments is a key strategy for minimising the risk of social tensions. China, in turn, positions itself as a reliable partner capable of meeting Uzbekistan’s needs, while simultaneously benefiting from increased exports.
• The record-breaking import of Chinese cars aligns with the broader trend of increasing China-Uzbekistan trade. In 2023, China surpassed Russia as Uzbekistan’s largest trading partner. According to Uzbek statistics, bilateral trade with China that year reached $13.7 billion (with imports accounting for $11.2 billion), whereas trade with Russia totalled $9.9 billion. This trend continued in 2024, with Uzbekistan-China trade reaching $12.5 billion, compared with $11.6 billion in Uzbekistan-Russia trade. Additionally, in 2024, the number of Uzbek companies with Chinese capital exceeded those with Russian capital, with a ratio of 3,300 to 3,000. These businesses primarily operate in the automotive and renewable energy sectors.