Southeast Asia's EV market primed for growth

Overseas car manufacturers, including Wuling and Volvo, have been steering the advancement of the EV sector in Southeast Asia, according to Counterpoint Research.

Notably, Wuling's Air EV emerged as the bestseller in 2022. However, Vietnam's VinFast topped EV sales charts in the region last year, according to TechInAsia.

The burgeoning EV market also demands a comprehensive support ecosystem, with infrastructure such as battery swapping and charging stations as essential as petrol stations for extended range travel. The region has seen a surge in startups addressing this demand, and recycling needs for lithium-ion batteries.

In the fiercely competitive market for electric two- and three-wheelers, startups like Ion Mobility, Dat Bike, and Viar are making significant strides. In this sector, Taiwan-based Gogoro, which listed on Nasdaq following its partnership with Gojek, is making headway with battery charging and swapping solutions.

The ASEAN markets are expected to require around 95,000 public AC and 40,000 DC charging points by 2030, as per a McKinsey study. Nations are already collaborating with local firms like Singapore's Charge+ and the Gojek-TBS Energi Utama joint venture, Electrum, to meet these infrastructure needs.

Upfront costs pose a significant barrier to EV adoption, but leasing options and government incentives in nations like Thailand, Singapore, and Indonesia are facilitating offsetting costs. These factors have ignited investor interest, with funding deals increasing by 35 per cent and sector investment by over 65 per cent in 2022.

Manufacturers like VinFast and Hozon have seen sizeable investments, with VinFast planning to ramp up production to 600,000 units by 2026. Despite VinFast's leading role, Thailand held the highest EV sales share in Southeast Asia last year, over 58 per cent, spurred by the presence of major car makers.

According to TechInAsia, Singapore, though fourth in regional EV sales, is the breeding ground for the largest number of industry startups. As tensions escalate between the United States and China, Southeast Asia is poised as an attractive alternative for the lithium-ion battery supply chain. Nickel-rich nations like Indonesia and Vietnam have attracted significant investment, setting the stage for Southeast Asia to become a key player in the global EV market.

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