Electric vehicle (EV) sales are experiencing a significant surge in Southeast Asia, primarily driven by China’s BYD and Vietnam’s VinFast, as they make inroads into a market traditionally dominated by Japanese and Korean internal combustion engine (ICE) car manufacturers. According to Counterpoint Research, EV sales in the region more than doubled in the first quarter of the year compared to the same period last year, while ICE car sales declined by 7%.
Counterpoint analyst Abhik Mukherjee noted that Chinese original equipment manufacturers (OEMs) are stepping in to fill the gap left by Japanese and Korean automakers, who have been slower to adopt EV technology. Over 70% of EV sales in Southeast Asia are from Chinese brands, with BYD leading the charge. In the first quarter of the previous year, Chinese car makers accounted for 75% of all EV sales in the region.
Thailand, Southeast Asia’s second-largest economy, is at the forefront of this shift. Chinese car manufacturers have committed more than $1.44 billion to establish new EV production facilities in Thailand, which accounted for 55% of all EV sales in the region during the first quarter, a 44% increase from the previous year.
Vietnam has seen even more impressive growth, with battery electric vehicle (BEV) sales increasing by over 400%, contributing to nearly 17% of regional EV sales. BYD has maintained its position as the top-selling EV maker in Southeast Asia, capturing 47% of the market, followed by VinFast.
BYD’s success in Southeast Asia, a relatively small EV market compared to other regions, is bolstered by its distribution partnerships with large local conglomerates. In contrast, U.S. electric carmaker Tesla saw its market share in the region drop by two percentage points to 4% in the first quarter, despite a 37% increase in sales during the same period.
Several Southeast Asian countries, including Thailand and Indonesia, have introduced incentives to boost EV demand and attract new investments. These incentives have been particularly appealing to Chinese car manufacturers who are facing intense price competition in their home market.
This trend reflects a broader shift in the automotive industry in Southeast Asia, as the region embraces the transition from traditional ICE vehicles to more sustainable and environmentally friendly EVs. The increasing presence of Chinese and Vietnamese EV manufacturers in the market indicates a significant transformation, driven by technological advancements and strategic investments.
READ MORE: