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Home»Finance»Shifting Gears: China’s Advanced EV Hegemony in Central Asia
Finance

Shifting Gears: China’s Advanced EV Hegemony in Central Asia

February 6, 2025No Comments12 Mins Read
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Shifting Gears: China’s Advanced EV Hegemony in Central Asia
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Global electric vehicle (EV) sales hit a record high in 2024, driven by a 40 percent surge in China, which sold 11 million EVs. While some Western countries imposed tariffs to curb Chinese EV imports, Central Asia embraced them, offering tax breaks and facilitating local production.

Kazakhstan saw a 36-fold rise in the sale of Chinese EVs in 2024, with projections reaching 40,173 vehicles by 2035. Kyrgyzstan remained a key importer, Tajikistan granted a decade-long tax exemption for EV imports, and Uzbekistan launched its first Chinese EV factory, with another planned for 2025.

“China’s push for EV infrastructure in Central Asia is strategic,” notes China-Central Asia expert Adina Masalbekova. “Beyond trade, it reduces petroleum dependency and deepens economic and geopolitical ties with Beijing.”

Despite corruption and weak rule of law, regional investment forums continue to draw hundreds of Chinese business leaders and officials, underscoring China’s growing economic and political foothold.

“China is Central Asia’s top investor, with over $15 billion in funding,” Temur Umarov, fellow at the Carnegie Russia Eurasia Center, told The Diplomat. “Authoritarian governments have used these projects for political leverage, making the region increasingly dependent on Chinese economic and technological influence. Chinese automakers, led by BYD, now dominate the global EV market, outpacing Tesla and German brands. Central Asia mirrors this trend.”

The level of Chinese investment in Central Asia varies significantly by country. While Kazakhstan and Uzbekistan maintain a more diversified economic landscape, Kyrgyzstan, Tajikistan, and Turkmenistan rely more heavily on Chinese funding. “Investment figures are complex and often difficult to calculate,” Umarov said. “I rely on Chinese data for consistency.” He adds that China’s economic role in the region is significant but aligns with broader global trade patterns.

“Central Asian economies primarily export unprocessed natural resources in exchange for high-value goods like machinery and technology. This structure isn’t unique to China – it’s how global trade operates.”

Uzbekistan

“I wish to remain anonymous, it’s risky to talk about China – even on neutral topics,” a resident of Tashkent told The Diplomat. 

Her mother, an employee at a local factory making reinforced concrete products for the construction industry, is familiar with Chinese factories, their working conditions, and wages. Officially, unemployment in Uzbekistan stood at 5.8 percent as of June 2024, however some experts believe the figure to be higher.

“People leave the local factory to earn $50-$100 more, but they can’t handle it and return,” the Tashkent-resident told The Diplomat. “China is opening businesses all over the country, constantly saying: ‘We’re opening new factories and creating jobs.’ This mostly benefits the Chinese owners, who pay relatively high salaries – around 6-7 million sums ($550) – but the working conditions are grueling. The Chinese are not afraid to fire workers. They know that 3-4 people will be eager to take the job, because people have no choice.”

In recent years, Chinese investments in Uzbekistan’s economy have quintupled, reaching $25 billion, and the number of joint ventures has tripled.

In the summer of 2024, Uzbek President Shavkat Mirziyoyev attended the opening of the Chinese BYD Uzbekistan Factory in Jizzakh, his home region, dedicated to EV production. The plant has created 1,200 jobs and plans to ramp up production from 50,000 to 500,000 EVs annually. China’s Xiaou Group plans to build another EV plant in the Fergana Valley, investing $1.5 billion over five years.

Despite a relatively closed national car industry, 20,080 Chinese EVs were imported into Uzbekistan in the first 10 months of 2024, up from 16,084 in 2023. 

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“Two years ago, it was unusual to see an electric car in Tashkent. Now, every tenth car is a Chinese BYD,” said another Tashkent resident.

Since Mirziyoyev signed a decree promoting local EV production in 2022, he has emphasized the need to expand EV charging infrastructure. In December 2023, the Ministry of Energy signed an agreement with China’s Henan Suda company to establish 50,000 charging stations by 2033. EV imports are exempt from excise taxes, customs duties, and automobile fees. Taxi drivers using electric or hybrid vehicles are also exempt from licensing fees until 2030. Entrepreneurs installing charging stations can benefit from financial incentives.

Abubakir, 31, an EV driver, says that Uzbek residents are rapidly switching to electric cars because they are more cost-effective and technologically advanced. 

“I’ve been driving a BYD since 2019,” he said. “Even though Chinese cars are cheap on the secondary market, more people are purchasing electric models. AI 95 [gasoline] costs $1 per liter, plus customs fees are lower, and taxes are reduced. The market is monopolized, like UzAuto Motors, but has it ever been different for us?”

According to reporting from investigative journalists with RFE/RL’s Uzbek Service, Ozodlik, the thriving auto business in Uzbekistan is directly linked to the president’s family. Yulduz Omonova, the youngest daughter of Inobat Mirziyoyeva, the president’s sister, owns private companies selling foreign cars. Yulduz’s husband, Sardor, is a member of the management of the state-owned car manufacturer UzAuto Motors.

Masalbekova notes that the authoritarian nature of governance and a lack of transparency obstruct progress in tracking the details of investment agreements. 

“Weak rule of law in the region often coincides with political elites’ connections, which frequently leads to censorship and the persecution of investigative journalists,” she told The Diplomat.

“People know that the entire EV business belongs to the president’s family, and directly linked to the name of the president’s son–in-law, Otabek Umarov. All initiatives are supported by the Government. There is no evidence, and those who investigate or speak out are immediately imprisoned,” said another Tashkent resident who declined  to share their name given the sensitivity of the subject.

Criticism of the president’s family is expensive. The author of the YouTube channel “Ko’zgu” (“Mirror”) Abdukadir Muminov was sentenced to seven years in prison on fraud and extortion charges, although rights groups say he was targeted for his work focusing on the business of Mirziyoyev’s sons-in-law.

Tajikistan

Tajikistan sits at the crossroads of China’s Belt and Road  initiative. During Xi Jinping’s state visit in the summer of 2024, new government buildings in Dushanbe – funded with $200 million in Chinese money – were inaugurated. Over the past decade, China has invested $2.6 billion in Tajikistan, with 57 percent of it being direct investments. More than 700 companies with Chinese participation have been established in the country.

The Tajik government has actively promoted EVs by offering tax breaks and customs duty exemptions. The country’s strategy includes a plan for the development of electric transport between 2023-2028. This plan aims to lay the groundwork for EV production and create infrastructure for the vehicles’ power supply, servicing, and battery disposal.

Tajikistan’s EV imports have doubled since 2022. In 2023, Tajikistan imported 3,316 EVs worth $59 million. By the first half of 2024, exports of EVs reached 5,266, valued at $76.4 million, or 26.7 percent of total vehicle imports.

The strategy sets ambitious goals, targeting 20-30 percent of the country’s vehicle fleet to be electric by 2030. Support programs offer discounts on EVs, build service centers, and offer lower prices for hybrid vehicles.

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An anonymous automotive expert from Dushanbe told The Diplomat, “Discussing China’s influence on Tajikistan is risky today.” Nevertheless, the expert said that, “EVs, mostly imported from China, cost around 170,000-220,000 somoni (15,000-20,000 dollars). Electricity is cheaper here, while gas and petroleum products are expensive, making EV a good option.”

These initiatives come amid a severe energy crisis. Early 2025 saw prolonged blackouts, forcing many people to rely on firewood and dung for heat. The main cause was declining river levels, disrupting hydro plants that generate 98 percent of Tajikistan’s electricity. Yet, despite shortages, electricity exports brought in $102.4 million in the first 10 months of last year. 

“Companies like BYD and BAIC have opened service centers in Tajikistan, providing residents access to necessary vehicle parts and services,” the automotive expert said “Dushanbe signed an agreement with a Chinese company to open a factory that will assemble at least 1,500 EVs annually. Although it’s just an agreement for now, the project is expected soon.”

He declined to comment on China’s influence in Dushanbe or the public opinion on the Chinese car industry. 

Anyone critical of China or questioning Dushanbe’s strategic partner faces repercussions. On January 23, media reports, later amplified by Human Rights Watch, claimed that investigative Tajik journalist Ruhshona Khakimova is subject to a “secret” trial in which she may face “treason” charges stemming from a survey she conducted on China’s influence in Tajikistan.

Kazakhstan

In the spring of 2024, Astana hosted Chinese Foreign Minister Wang Yi for an official visit. Following the meeting with Wang, Kazakh Foreign Minister Murat Nurtleu stated that “the proposal from the Chinese side to establish EV production in Kazakhstan will be fully supported by the Kazakh side.” Wang also shared China’s plans to localize the production of EVs in Kazakhstan.

In 2023, Kazakhstan experienced a significant increase in the number of registered electric vehicles, rising 9.2 times, from 914 to 8,366 units. This surge is due to the Eurasian Economic Union’s decision to extend the duty-free import of electric vehicles until the end of 2025, which will enable consumers to save about 15 percent of the vehicle’s customs value.

Astana is actively developing the EV industry with the support of Chinese production, despite challenges such as energy shortages and outdated power grids. The government has already passed a law establishing a roadmap for infrastructure, to be implemented by 2029.

According to the forecast in the document, the number of EVs in Kazakhstan may reach 40,173 by 2035.

Kyrgyzstan

Kyrgyzstan has become the leading re-exporter of Chinese cars to Russia among Central Asian countries.

In 2023, Kyrgyzstan imported $651 million worth of Chinese hybrid cars, the equivalent of about 5 percent of GDP. In 2024, 7,541 EVs, valued at $219.8 million, were delivered. 

According to Umarov, EVs are not classified as dual-use goods and thus avoid secondary sanctions, allowing Chinese companies to operate in Russia without restrictions. “Sales of Chinese cars, including EVs, continue to grow legally in Russia,” he noted.  

A Kyrgyz businessman active in the Chinese EV market since 2019 told The Diplomat, “Kyrgyz customs makes imports easy, while Russian tariffs on newer cars are prohibitively high. Importers clear vehicles at EAEU rates in Kyrgyzstan, then resell them in Russia at a small margin. A process largely managed by Chinese exporters themselves.”  

Kyrgyzstan accounts for 7.7 percent of Russia’s new car imports, but as of April 1, 2024, new Russian regulations have restricted EAEU-rate imports, impacting re-exports. 

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“We’re adjusting due to high recycling fees, expensive loans, and a weaker ruble,” the businessman said. “However, thanks to government foresight, re-exports continue under new customs rules aligned with Russian legislation.”

Meanwhile, China’s Neta Motors is expanding into Kyrgyzstan. In February 2024, construction began on an EV and commercial truck plant near Bishkek in collaboration with Hubei Zhuoyue Group, with an initial $115 million investment.  

China accounts for 36.7 percent of the republic’s external debt, making it the country’s largest creditor.

Umarov highlighted one of the most controversial Chinese projects in Kyrgyzstan in the last decade: the modernization of Bishkek’s thermal power plant by the Chinese company TBEA. The project became a political flashpoint in January 2018 when it broke down during a harsh cold-spell. The then-prime minister was later sentenced to 15 years on corruption charges related to the project. What was initially presented as a beneficial investment ultimately turned into a costly scandal, although no Chinese were ever held to account for their part in the mess.

Turkmenistan

In 2023, Turkmenistan received its first batch of 10 E-J7 EVs from China’s JAC Motors, along with five 60 kW charging stations. These vehicles are designated for use as city taxis in Arkadag, a city purpose-built with smart technologies and eco-friendly infrastructure and named after former President Gurbanguly Berdimuhamedov’s title.  

The introduction of Chinese EVs in Arkadag aligns with Turkmenistan’s broader strategy to modernize urban infrastructure and promote sustainable technologies. The installation of charging stations underscores the country’s commitment to developing the necessary support for electric mobility.  

“While data on Turkmenistan is scarce, China’s dominance in the country’s gas sector – accounting for 80 percent  of Turkmenistan’s exports – suggests that favorable conditions have been created for Chinese companies,” said Umarov.  

Turkmenistan has also been invited to the 2025 International Exhibition of New Energy Transport Technologies in China, signaling Beijing’s interest in deepening collaboration on electric vehicle development.

The Growing Impact of China in Central Asia’s EV Market

Each Central Asian country interacts with China differently based on its unique economic and political context. Kazakhstan balances its ties with China, localizing EV production while developing broader infrastructure for sustainability. Uzbekistan relies heavily on Chinese investments, with rapid growth in the EV sector and concerning alleged political ties between the president’s family and Chinese businesses. Kyrgyzstan serves as a re-export hub for Chinese EVs, especially to Russia, benefiting from its strategic position but without large-scale industrial development. Tajikistan focuses on Chinese investments in infrastructure and green technologies, aligning with China’s broader interests, but political sensitivities exist. And Turkmenistan primarily engages with China on energy projects, with a growing interest in Chinese EVs for urban modernization.

China’s expanding role in Central Asia’s EV market is transforming the region’s transportation landscape. Economic, political, and environmental trends are accelerating this shift, with China at the forefront, driving both trade and infrastructure development.  

Beyond economic benefits, China is leveraging diplomacy to deepen its strategic influence. By integrating its technology and economic models into Central Asia, Beijing is not just expanding its economic footprint but also shaping the region’s political and industrial future.  

“As EV adoption, infrastructure development, and joint production projects grow, so does the region’s dependency on Chinese investments,” said Masalbekova. “China is solidifying its image not just as an economic powerhouse, but as a leader in advanced technology.”

advanced Asia central Chinas Gears Hegemony Shifting
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