diff --git a/src/components/providers/auth.test.tsx b/src/components/providers/auth.test.tsx
new file mode 100644
index 00000000..dfa11917
--- /dev/null
+++ b/src/components/providers/auth.test.tsx
@@ -0,0 +1,127 @@
+/* eslint-disable max-lines-per-function */
+import { act, screen, waitFor } from '@testing-library/react-native';
+import React from 'react';
+
+import { render } from '@/core/test-utils';
+
+import { AuthProvider, authStorage, HEADER_KEYS, useAuth } from './auth';
+
+jest.mock('@/api', () => {
+  const originalModule = jest.requireActual('@/api'); // Import the original module
+  const mockStore: Record<string, string> = {};
+
+  return {
+    ...originalModule, // Spread the original module to keep other exports
+    authStorage: {
+      getString: jest.fn((key: string) => mockStore[key] || null),
+      set: jest.fn((key: string, value: string) => {
+        mockStore[key] = value;
+      }),
+      delete: jest.fn((key: string) => {
+        delete mockStore[key];
+      }),
+    },
+    client: {
+      interceptors: {
+        request: { use: jest.fn(), eject: jest.fn() },
+        response: { use: jest.fn(), eject: jest.fn() },
+      },
+    },
+  };
+});
+
+const TestComponent: React.FC = () => {
+  const { token, isAuthenticated, loading, ready, logout } = useAuth();
+
+  return (
+    <div>
+      <p data-testid="token">{token}</p>
+      <p data-testid="isAuthenticated">{isAuthenticated ? 'true' : 'false'}</p>
+      <p data-testid="loading">{loading ? 'true' : 'false'}</p>
+      <p data-testid="ready">{ready ? 'true' : 'false'}</p>
+      <button data-testid="logout" onClick={logout}>
+        Logout
+      </button>
+    </div>
+  );
+};
+
+describe('AuthProvider', () => {
+  render(
+    <AuthProvider>
+      <TestComponent />
+    </AuthProvider>,
+  );
+
+  afterEach(() => {
+    jest.clearAllMocks();
+  });
+
+  it('should initialize with loading and ready states', async () => {
+    (authStorage.getString as jest.Mock).mockImplementation((key) => {
+      if (key === HEADER_KEYS.ACCESS_TOKEN) {
+        return 'mockToken';
+      }
+      if (key === HEADER_KEYS.EXPIRY) {
+        return '2100-01-01T00:00:00.000Z';
+      }
+      return null;
+    });
+
+    expect(screen.getByTestId('loading').textContent).toBe('true');
+    expect(screen.getByTestId('ready').textContent).toBe('false');
+
+    await waitFor(() =>
+      expect(screen.getByTestId('loading').textContent).toBe('false'),
+    );
+    expect(screen.getByTestId('ready').textContent).toBe('true');
+    expect(screen.getByTestId('isAuthenticated').textContent).toBe('true');
+    expect(screen.getByTestId('token').textContent).toBe('mockToken');
+  });
+
+  it('should handle expired token', async () => {
+    (authStorage.getString as jest.Mock).mockImplementation((key) => {
+      if (key === HEADER_KEYS.ACCESS_TOKEN) {
+        return 'expiredToken';
+      }
+      if (key === HEADER_KEYS.EXPIRY) {
+        return '2000-01-01T00:00:00.000Z';
+      }
+      return null;
+    });
+
+    await waitFor(() =>
+      expect(screen.getByTestId('loading').textContent).toBe('false'),
+    );
+    expect(screen.getByTestId('isAuthenticated').textContent).toBe('false');
+    expect(screen.getByTestId('token').textContent).toBe('');
+  });
+
+  it('should clear storage and state on logout', async () => {
+    (authStorage.getString as jest.Mock).mockImplementation((key) => {
+      if (key === HEADER_KEYS.ACCESS_TOKEN) {
+        return 'mockToken';
+      }
+      if (key === HEADER_KEYS.EXPIRY) {
+        return '2100-01-01T00:00:00.000Z';
+      }
+      return null;
+    });
+
+    await waitFor(() =>
+      expect(screen.getByTestId('loading').textContent).toBe('false'),
+    );
+
+    act(() => {
+      screen.getByTestId('logout').click();
+    });
+
+    expect(authStorage.delete).toHaveBeenCalledWith(HEADER_KEYS.ACCESS_TOKEN);
+    expect(authStorage.delete).toHaveBeenCalledWith(HEADER_KEYS.REFRESH_TOKEN);
+    expect(authStorage.delete).toHaveBeenCalledWith(HEADER_KEYS.USER_ID);
+    expect(authStorage.delete).toHaveBeenCalledWith(HEADER_KEYS.EXPIRY);
+
+    expect(screen.getByTestId('isAuthenticated').textContent).toBe('false');
+    expect(screen.getByTestId('token').textContent).toBe('');
+  });
+});