Kyrgyzstan Seeks EV Industry Independence

Kyrgyzstan Seeks EV Industry Independence

Executive Summary:

• Kyrgyzstan has rapidly become a key Eurasian hub for importing and re-exporting Chinese electric vehicles (EVs), but this policy risks deepening technological and financial dependence on Beijing.
• Bishkek is partnering with South Korea on charging networks and the localized production of EV infrastructure, and is seeking to anchor higher-value, tech-intensive activities within Kyrgyzstan to hedge against overdependence on the People’s Republic of China (PRC).
• Technical interoperability and worker shortages threaten Kyrgyzstan’s aim to move up the EV value chain.

Kyrgyzstan has rapidly emerged as one of Central Asia’s leading importers of electric vehicles (EVs) from the People’s Republic of China (PRC), reflecting the region’s shifting transport landscape. In 2023 alone, the country imported nearly 79,000 vehicles—over forty times more than in 2022—thanks to favorable Eurasian Economic Union (EAEU) policies that exempt EVs from customs duties (24.kg, February 24, 2024).  Cheap electricity and the affordability of Chinese models have made EVs increasingly appealing for Kyrgyz consumers, while helping reduce the country’s heavy dependence on imported oil (24.kg, August 19, 2023; Achkabar, September 19, 2024).

The surge in imports is not driven solely by domestic demand. Kyrgyzstan’s location within the EAEU has turned it into a crucial re-export hub for Chinese vehicles, particularly to Russia, where demand remains strong. Of the vehicles imported in 2023, about 60,000 were reexported, underscoring Bishkek’s growing role as both a participant in the regional green transition and a vital trade bridge in Russia’s sanctions evasion schemes (Eurasianet, February 28, 2024).

The PRC’s involvement is not limited to exporting vehicles (see EDM, October 20, 2024). It has also begun investing in Kyrgyzstan’s infrastructure to establish local assembly facilities and benefit from the country’s position. One significant example is the Hubei Zhuoyue Group, which has invested $115 million to build an electric vehicle assembly plant in Sokuluk to the west of Bishkek. The company’s plan to produce up to 80,000 vehicles a year shows that the project is focused mainly on regional markets rather than Kyrgyzstan’s small domestic market of 7.2 million people (24.kg, February 29, 2024)

These investments strengthen Kyrgyzstan’s position as a re-export hub even as they bring long-term risks of dependence. Chinese assembly operations without meaningful localization may deepen the country’s technological dependence on the PRC, alongside its already high debt levels. Limited localization also slows progress in economic diversification, job creation, and human capital development (Akchabar, October 25).

In response to these concerns, Bishkek has recently signed agreements with South Korea and Russia to enhance independence and reduce geopolitical risks. These initiatives show Kyrgyzstan’s intention to balance its partnerships and avoid excessive dependence on any single foreign power, while providing long-term flexibility to maintain and evolve the national EV ecosystem.

In June, Sanzhar Bolotov, Kyrgyzstan’s deputy minister of economy and commerce, signed a Memorandum of Understanding with EVSIS, the Korea Eco-Friendly Vehicle Association, and NGS to jointly implement a project to develop an electric vehicle charging network (Trend News Agency, June 23). Additionally, a trilateral memorandum of cooperation was signed between the Kyrgyz Center, Chakan HPP OJSC, and the South Korean company Blue Networks Co., Ltd. The agreement outlines plans to establish production of electric charging stations within Kyrgyzstan. The main goals of this initiative are to promote environmentally friendly transport infrastructure, localize high-tech production, and create new employment opportunities (24.kg, August 1). These agreements with South Korea show Bishkek’s clear intention to reduce its dependence on the PRC in the electric vehicle sector and to promote localization as a step toward building an independent industrial base in the long term.

The growing partnership with South Korea rests on two main objectives. The first is to accelerate the rollout of electric vehicle charging stations. A major obstacle to widespread EV adoption in Kyrgyzstan has been the lack of sufficient public charging infrastructure, and the cooperation with South Korea is designed to address this gap and support the national transition to electric mobility (Kaktus Media, September 1, 2023). The second objective focuses on establishing a practical division of responsibilities within Kyrgyzstan’s multi-vector development strategy. This approach allows the country to continue sourcing vehicles from the PRC while relying on a non-traditional technological partner such as South Korea to develop the necessary charging infrastructure.

The Kyrgyz Ministry of Economy and Commerce has also signed a memorandum of cooperation with the Russian state atomic energy corporation Rosatom, Energy Solutions Kyrgyzstan LLC, and Elbrus Construction Company LLC to explore the development of lithium battery production in the country (Times of Central Asia, September 29). The agreement includes joint efforts to assess the domestic lithium battery market and to prepare proposals for establishing localized production.

The focus on lithium batteries, which are a crucial component of electric vehicles, represents another step in Kyrgyzstan’s strategy to diversify its partnerships and advance long-term localization. This approach can help Bishkek reduce its dependence on the PRC and pursue a more flexible and balanced national strategy. Given Kyrgyzstan’s own lithium reserves, cooperation with Russia in this field can help the country move up the value chain, capture greater economic benefits, and develop a stronger export-oriented industry (Times of Central Asia, October 31, 2024; Caspian Post, July 8).

Through these partnerships, Kyrgyzstan aims to stabilize its domestic production system in the long term. By developing a complementary division of labor with multiple partners, the country seeks to build a national electric vehicle ecosystem that integrates different components from different sources. This approach allows Kyrgyzstan to strengthen its domestic capacity while avoiding the creation of another single channel of dependence, particularly on the PRC.

Through localized cooperation, such as developing EV charging systems with South Korea and lithium battery production with Russia, Bishkek can move beyond its current role as a re-export hub and begin building domestic industrial capacity (Cabar.asia, July 19, 2024; 24.kg, September 10). Establishing production of charging stations and batteries would lay the foundation for a self-sustaining,  technologically capable industrial base that reduces long-term reliance on imports and creates higher-value employment opportunities.

Kyrgyzstan’s diversification efforts also face significant challenges. The first relates to long-term technological compatibility. Even if the production of electric vehicle chargers or lithium batteries succeeds, aligning the technical standards of Chinese, South Korean, and Russian systems will be a major obstacle that could limit the diversification (OSCE Academy, February 28, 2023; Vesti.kg, September 24, 2024).

Beyond technical and regulatory issues, managing an electric vehicle ecosystem that combines Chinese vehicles, South Korean charging infrastructure, and Russian battery systems requires a strong foundation of human capital (Economist.kg, February 19). Each of these components follows different technological and operational standards, and integrating them into a single national system demands specialized knowledge and coordination.

Kyrgyzstan currently faces a shortage of skilled professionals capable of managing complex, multi-layered technological systems (TASS, September 23). Without significant investment in education, training, and institutional capacity, this gap could undermine the country’s ability to sustain its diversification strategy and limit its long-term progress toward technological and industrial independence.

Kyrgyzstan’s efforts to diversify its electric vehicle partnerships and build a national EV ecosystem reflect Bishkek’s growing awareness of the need to engage multiple stakeholders while reducing its dependence on the PRC. This strategy aims to transform the country’s role from being mainly a re-export hub into an economy capable of generating real value through localized production and technological development.

The success of this diversification will depend not only on establishing new partnerships but also on achieving technical harmonization and standardization. Integrating diverse technologies into a single national framework requires clear regulations and compatible technical standards to ensure smooth and safe operation.  Furthermore, long-term progress will rely on Kyrgyzstan’s investment in human capital to build a skilled workforce capable of managing a complex and multi-technology EV ecosystem. By aligning education, regulation, and industrial policy, Bishkek can turn its diversification strategy into a sustainable path toward economic resilience and technological independence.