BYD to establish local production in Azerbaijan following awarding of a 160-units e-bus tender

BYD has won in Azerbaijan a tender for electric bus procurement project and was awarded a order for 160 12-metre electric buses K9UD, with plans to deploy these buses on Baku city routes by October 31, 2024.

What is more, plans are in place to “establish local production and gradually localize spare parts starting from 2025“, the Azeri government states in a press note.

3,000 electric buses are reportedly set to be deployed in the coming years in the country belonging to the South Caucasus region (bordering with Russia, Georgia, Armenia and Iran).

BYD to provide buses in Azerbaijan

BYD also states that according to the framework of the agreement, the Azerbaijani government will also purchase 200 electric buses from BYD every year from 2025 to 2028 and assemble them locally.

Within the framework of the Agreement signed by BYD in Azerbaijan, the government announces, “BYD considers investing in new production areas to enhance the value chain in our country. From 2026, the collaboration will extend to manufacturing low-tonnage electric trucks, utility vehicles, and electric passenger cars. From 2028, the focus will shift to assembling batteries for electricity storage. An additional investment of approximately $60 million is planned for these projects through a joint venture to be established”.

Local production of BYD buses in Azerbaijan

A Framework Agreement was signed between Electrify Azerbaijan Company and China’s “BYD Company Limited” (BYD) to ensure the local production of buses during a meeting held in the Cabinet of Ministers of the Republic of Azerbaijan with the participation of Shahin Mustafayev, the Deputy Prime Minister. The agreement was signed by Elnur Aliyev, the First Deputy Minister of Economy, Rahman Hummatov, the Deputy Minister of Digital Development and Transport, Tien Chunlon, the Executive Director for Commercial Vehicles at BYD, and Tariyel Rustamov, the Director of “Electrify Azerbaijan” LLC.

The Framework Agreement envisages the purchase of electric buses, their maintenance, and the establishment and localization of production within Azerbaijan.

As mentioned, the collaboration with BYD in Azerbaijan includes establishing local production and gradually localizing spare parts starting in 2025. The project encompasses support mechanisms, joint venture financing, and the presentation of intellectual property rights, aiming for 40% localization of the buses’ total costs by 2030. The project agreement is scheduled for signing in September this year.

“Azerbaijan Investment Company” OJSC will participate in the project on the production of electric buses in our country as a shareholder. BYD’s Azerbaijani partner is “Electrify Azerbaijan” LLC, part of the “SARDA Group” company. The new joint venture will invest around $34 million to build an electric bus manufacturing plant in the Sumgait Chemical Industrial Park, with an annual production capacity of 500 buses to meet domestic and export demands. The project will create 800 new jobs.