On March 18, President of Uzbekistan Shavkat Mirziyoyev signed a resolution approving an investment agreement to establish production of BYD electric and hybrid vehicles and their components in Uzbekistan.

The agreement is a result of the joint launch of a full-scale car production in Uzbekistan in August 2022 jointly by Uzavtosanoat and China’s BYD Auto.

On December 29, 2022, Uzavtosanoat (holding a 60% stake) and BYD Europe B. V. (Netherlands, with a 40% share) established a joint venture BYD Uzbekistan Factory. On September 26, 2023, a project implementation agreement was signed between the government of Uzbekistan and the investor, paving the way for the introduction of the BYD brand in Uzbekistan starting from 2023.

The resolution outlines the obligation of the investor and the joint venture to attract a total investment of $160 million, including $60 million in foreign direct investment, throughout the project’s implementation period.

In the initial stage during 2024, the production of electric and hybrid cars is set to start using the complete knock-down (CKD) method, aiming for a production capacity of 50,000 units. Subsequent stages of the project are expected to increase the capacity to 500,000 units per year.

The investor should create 1,000 jobs and facilitate the gradual localization of production of components and spare parts for manufactured cars at domestic enterprises. Such components include glass, seats, plastic parts and bumpers.

Additionally, the investor is committed to allocating funds for research and regular professional development of local personnel, including training at BYD facilities abroad.

The president directed the Ministry of Investment, Industry and Trade and Uzavtosanoat to negotiate with BYD to include additional clauses in the agreement beyond the target of achieving the production capacity of 500,000 units per year. The additional clauses encompass a target of reaching a localization level of 60%, creating 10,000 jobs, and expanding the list of permanent export destinations for the cars, in addition to those established by the joint venture.

The agreement is also expected to include measures aimed at protecting consumers' interests in purchasing high-quality and safe electric and hybrid cars, ensuring their compliance with local climate and providing warranty services. Additionally, it will seek to create equal conditions for granting benefits and preferences to all car-producing enterprises, including the investor.

As previously reported, the same decree mentions BYD’s appeal to the government of Uzbekistan to limit the “disordered” import of electric and hybrid cars. This request stems from the company’s concerns that privately imported models are not suitable to the local climate and road conditions as well as lack an official warranty.

The president directed the Ministry of Economy and Finance, the Ministry of Investment, Industry and Trade as well as Uzavtosanoat to submit proposals to the Cabinet of Ministers by July 1. These proposals are aimed at implementing the investor’s request to regulate the import of electric and hybrid cars bearing the BYD brand in accordance with the current legislation, including competition law and principles of the World Trade Organization.