Europe, the birthplace of the automobile industry, to North America across the Pacific Ocean, has always been the top stage that Chinese car companies hope to step on. However, the Southeast Asian market at home has recently become a new target for many car companies. What is the mystery behind it?

A large market of 10 million vehicles

Figures released by the ASEAN Automotive Federation (AAF) show that total vehicle sales in Southeast Asia will be about 2.79 million units in 2021, up 14% year-on-year. Although the market is small, the growth rate is relatively strong. And new energy vehicles will be one of the new growth points. Southeast Asia’s new energy vehicle market is expected to grow from about $500 million in 2021 to $2.67 billion in 2027, a compound annual growth rate of 32.73%.

Congested traffic in Thailand

The attractiveness of Southeast Asia to new energy vehicle companies is gradually strengthening. According to the Association of Passenger Transport, in the first half of 2022, China exported 58,400 new energy passenger cars to Southeast Asia, accounting for 16.1 percent, making it the second largest market for new energy passenger car exports. With the current sales figures and the seductive future expectations, Southeast Asia has successfully attracted the attention of Chinese car companies. In addition, the tax rate for pure electric vehicles in Thailand was reduced from 8% to 2% in June this year. And there is also a 150,000 baht (equal to more than 27,000 yuan) subsidy for each pure electric vehicle purchase. According to Thailand’s electric vehicle plan, zero-emission vehicles will account for 30% of new vehicle production by 2030; by 2035, all cars produced in Thailand will be zero-emission.

On the infrastructure side, by 2030, Thailand will have 12,000 fast-charging heads available at public fast-charging stations and 1,450 charging stations built. With regular government subsidy practices, solid tax adjustments, and transparent plans, this series of actions gives Chinese car companies a familiar smell. It is foreseeable that Thailand will soon see an explosion of new energy vehicles. For Chinese car companies, there is no reason to reject this opportunity.

SETEC POWER, China’s leading EV charging infrastructure manufacturer, has also tapped into the Southeast Asian market. Thousands of EV chargers have already provided quality services to EV owners in Southeast Asia. In particular, the Emergency Mobile EV Charging System demonstrated the advanced mobile charging service for distinguished guests at the G20 Summit.

SETEC-POWER-Mobile-EV-Charging-System-Unveiled-in-Bali

In addition, other countries in Southeast Asia, besides Thailand, are in the midst of similar changes as the world’s fifth largest economy with a consumer market of 660 million people, Thailand, Vietnam, Singapore, and Indonesia together sold only 13,000 new energy vehicles in the first half of 2022. That is an unexplored continent that needs to be tapped. Malaysia’s Ministry of International Trade and Industry (MITI) has recently announced that nearly 700 of the country’s previously set goal of completing 10,000 public charging posts for electric vehicles by 2025 have already been built. The Philippines, for its part, is making a significant effort to procure electric buses and has introduced a policy requiring domestic public transport companies to increase the proportion of their pure trams to more than 5 percent. Indonesia plans to subsidize electric vehicles starting next year and hopes to reach 2.5 million electric vehicle users by 2025 to stimulate market demand and reduce air pollution.

According to the International Renewable Energy Agency (IRENA), the sales of electric vehicles in Southeast Asia will increase to 10 million by 2025.

The PK of electrification between Chinese and Japanese car companies

Chinese car companies want to seize the Southeast Asian market; perhaps the biggest problem is the local solid Japanese cars. Data show that in 2021, the first car sales in Thailand Toyota, selling 239,000 units; the second place is Suzuki, 167,000 units; the third place is Honda, 88,700 units; the fourth is Mitsubishi, 47,000 units; the fifth is Mazda, 35,000 units. Japanese cars firmly dominate the Thai car market. However, in October this year, all Chinese car companies were the top ten sales in China’s new energy vehicle market except for Tesla. Obviously, in China’s new energy vehicle market, the strength of Japanese cars and Chinese car companies is disparate. This situation has a Japanese car company in China strategy and local market protection factors. In the Southeast Asian market, under the premise of the absolute dominance of Japanese cars, Chinese car companies can still win?

Southeast Asia Auto Sales Data

Data shows that only 1,954 electric vehicles will be sold in Thailand in 2021. The Federation of Thai Industries believes electric car sales will exceed 10,000 units this year, a fourfold increase. Currently, the electric cars sold in Thailand are mainly from Chinese car companies. Japanese vehicles should be focusing on something other than the electric car market in Thailand. According to Cassikorn Research Center estimates, the market share of Chinese electric cars in Thailand will be about 58% in 2021 and will reach 80% this year, while the percentage occupied by European electric vehicles is expected to be only 14%, Japanese brands 5% and other brands 1%. Japanese brands are also starting to act because of the Thai government’s emphasis on new energy and the Chinese car companies’ offensive.

At this year’s Bangkok Motor Show, Toyota showcased the bZ4X electric car and said it will sell Japanese-made electric vehicles in Thailand by the end of this year, with local production coming out as soon as 2024. Chinese car companies have once again seized the opportunity in Thailand. In April 2022, Ningde Times reportedly announced it would invest $6 billion in Indonesia to build battery materials, battery manufacturing, and recycling projects, saving Chinese new energy car companies a lot of manufacturing costs.

This time, will Japanese car companies again lose to Chinese car companies? In any case, the electrification of cars may become an irreversible trend for humanity, and the development of renewable energy is strong proof of our commitment to environmental protection.