In Southeast Asia’s EV race, car makers gun it for the chequered flag – as consumer demand lags behind

A recent triple-digit surge in demand for electric vehicles belies the fact that Southeast Asia lags other regions in creating viable EV ecosystems

But EV makers are still pouring money into the likes of Thailand, Indonesia and Malaysia, driven by climate change – and the US-China trade war

Reading Time:8 minutes

A Vinfast electric car is seen on a Hanoi street in August. Analysts say Vietnam is an outlier in Southeast Asia’s EV race, with less of a focus on attracting foreign direct investment and more on building up domestic brands. Photo: EPA-EFE

Published: 9:30am, 4 Nov 2023Updated: 12:18pm, 4 Nov 2023

Malaysian human resources manager Zamir Noor, 35, thinks it’s “pretty cool” that he upgraded to an EV long before many of his friends – especially now that there’s a charging station right next door to his Kuala Lumpur gym where he can recharge his Hyundai Ioniq 6.

In Bangkok, Thai media worker Sathapat Paethong, 35, says he’s saving two-thirds of what he used to spend on petrol every month since switching to an Ora from China’s Great Wall Motor; and in Bandung, 27-year-old Winardy Pranoto thanks Indonesian government subsidies for encouraging him to purchase his new zip-around car: a Wuling mini EV.

Southeast Asia has become a multibillion-dollar battleground for foreign investment in electric vehicles (EVs), as nations jostle for the attention of major marques: offering raw materials, tax breaks, infrastructure and tens of millions of potential future owners.

A Good Cat EV by Ora, a brand of China’s Great Wall Motor, is displayed at the Bangkok International Motor show in Thailand last year. Photo: Reuters

Thailand has lured Chinese manufacturers BYD and Great Wall Motor; Malaysia has Volvo and Mercedes-Benz; and Indonesia has reeled in Hyundai but is still courting Tesla, as Southeast Asian governments rush to shape policies that provide the perfect conditions to become EV hubs.

Domestic sales are multiplying fast, but are still broadly limited to the urban middle and upper middle-classes – the likes of Zamir, Sathapat and Winardy – with many mass-market buyers in Southeast Asia unable to afford entry prices that start at around US$20,000.

Instead, the big names are seeking to make their money via exports, with cheap land and labour, infrastructure and soft taxes, all appealing to companies looking to build out their supply chains.

Demand for EVs in Southeast Asia surged in the second quarter of this year, with 894 per cent year-on-year growth in total sales – the highest globally – driven by consumers across Thailand, Vietnam, Indonesia and Malaysia, according to data from Counterpoint Research.

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In Southeast Asia’s EV race, car makers gun it for the chequered flag – as consumer demand lags behind

A recent triple-digit surge in demand for electric vehicles belies the fact that Southeast Asia lags other regions in creating viable EV ecosystems But EV makers are still pouring money into the likes of Thailand, Indonesia and Malaysia, driven by climate change – and the US-China trade war

A recent triple-digit surge in demand for electric vehicles belies the fact that Southeast Asia lags other regions in creating viable EV ecosystems

But EV makers are still pouring money into the likes of Thailand, Indonesia and Malaysia, driven by climate change – and the US-China trade war