Runner Automobiles yet to finalise investment, financial impact of BYD deal

The final investment size and financial implications of the agreement between Runner Automobiles PLC and Chinese electric vehicle maker BYD have yet to be determined, the company said in a disclosure to investors.

In response to a query from the Dhaka Stock Exchange, Runner Automobiles stated that the Master Supply and Manufacturing Agreement (MSMA) currently serves as a preliminary framework to assess the project's feasibility, implementation timeline and expected financial outcomes.

The company's share price closed at Tk40.30 on the Dhaka bourse today (29 March).

Earlier, Runner informed the DSE that it would assemble and supply electric vehicles of BYD, following the signing of an agreement with BYD Auto Industry Company.

The board of directors approved the MSMA on 20 March, prompting the DSE to seek further clarification, including details of the agreement and its potential financial impact.

In its explanation, Runner said the MSMA outlines a structural framework for vehicle production under the Completely Knocked Down (CKD) model, under which components will be imported and assembled locally.

The company noted that the agreement is being used to evaluate key aspects of the project, including investment size, production capacity, supply chain requirements, market potential, and projected revenues and costs.

However, it emphasised that detailed commercial and financial terms have not yet been finalised. These will be determined through separate Technical Licence Agreements (TLAs) for each vehicle model.

Under these model-specific agreements, key elements such as technology transfer, production processes, pricing, marketing strategy, and financial structure will be defined. As a result, the actual investment size and profitability of the project will depend on the terms of these future agreements.

Runner further stated that the MSMA was signed on 20 March 2025, during a BYD conference held in Shenzhen, China. However, some legal formalities from BYD's side are still pending.

The company expects these formalities to be completed within the next five to six working days. Once completed, the signed copy of the agreement will be shared with the DSE and other relevant stakeholders.

Meanwhile, the final investment, financial projections, cost structure, and other key indicators of the project remain under evaluation.

The company noted that these will require approval from both BYD and the board of directors of Runner Automobiles before being finalised.

Market insiders say that the absence of immediate financial clarity may create some uncertainty among investors in the short term.

However, considering BYD's strong position in the global electric vehicle market, the partnership could offer significant long-term potential.

Although Bangladesh's electric vehicle market is still at an early stage, rising fuel costs, growing environmental awareness, and supportive government policies are gradually increasing interest in alternative mobility solutions.

Local assembly under the CKD model could also contribute to industrialisation, job creation, and technological advancement.

Runner Automobiles said it will disclose the investment details, financial impact, and other relevant information in due course once these are finalised and approved.