# How China took over the Southeast Asia EV market

- Link: https://www.thailand-business-news.com/business/151095-how-china-took-over-the-southeast-asia-ev-market
- Published: 2024-07-15T09:48:00+07:00
- Author: J. Allan

Chinese companies are increasingly expanding their presence in emerging markets,
particularly in Southeast Asia, where there is a growing demand for electric vehicles(
EVs). Chinese EVs hold a competitive advantage in terms of pricing, which makes 
them more appealing compared to their pricier Western and Asian counterparts.

## Key Takeaways

 * China is leading the production of electric vehicles worldwide with nearly 60%
   ownership of the market.
 * China has quadrupled its export value from electric car batteries, from US$8.59
   billion in 2021 to US$34.13 billion by 2023. 
 * Different Chinese brands such as BYD, SAIC Motor Corp-owned MG, Nio, GAC Motor,
   Li Auto, Geely, and Chery took over 53% of the global electric vehicle market.
 * In 2023, there was a notable 894% year-on-year increase in electric vehicle (
   EV) demand in South-East Asia. Chinese companies have entered this growing market
   in recent years and quickly become its dominant force.

According to the International Energy Agency, China accounted for around 60% of 
global electric car sales in 2023. This highlights China’s significant role in the
electric vehicle market, both in terms of production and sales.

ADVERTISEMENT

Different Chinese brands such as BYD, SAIC Motor Corp-owned MG, Nio, GAC Motor, 
Li Auto, Geely, and Chery took over 53% of the global electric vehicle market. Chinese
EV manufacturers are expanding their presence in Southeast Asia, capitalizing on
the region’s growing demand for EVs and investing in production facilities to solidify
their position.

Over the last three years, China has quadrupled its export value from electric car
batteries, from US$8.59 billion in 2021 to US$34.13 billion by 2023. 

Chinese EVs have a competitive edge in pricing, making them more attractive than
their more expensive Western and Asian counterparts. With low-end models starting
at US $12,000 and incentives available in countries like Indonesia and Thailand,
Chinese brands are gaining appeal in Southeast Asia.

Bangkok’s commitment and fiscal policies have accelerated the development of electric
vehicles (EVs) in Thailand. The country has introduced an eight-year corporate tax
holiday for EV projects, a 40% reduction on import duties, and a cut in excise tax
from 8% to 2% and [subsidies for eligible EVs](https://www.aseanbriefing.com/news/thailand-ev-purchase-subsidy-scheme-2024-to-2027-boost-local-production/).

China’s dominance in the Southeast Asia electric vehicle (EV) market can be attributed
to several key factors:

### Related**Posts**

###  󠀁[Thailand’s Floods Expose Severe Vulnerabilities in Its Automotive Supply Chain](https://www.thailand-business-news.com/business/332669-floods-in-thailand-highlight-the-vulnerability-of-the-countrys-automotive-supply-chain)󠁿

###  󠀁[Thailand Business News — Morning Briefing](https://www.thailand-business-news.com/business/332413-thailand-business-news-morning-briefing-2)󠁿

###  󠀁[Thailand is making AI and semiconductors the focus of its next five-year development plan](https://www.thailand-business-news.com/business/332032-thailand-is-making-ai-and-semiconductors-the-focus-of-its-next-five-year-development-plan)󠁿

###  󠀁[How China’s Innovation Drives the Transformation of Thailand’s Economy](https://www.thailand-business-news.com/china/325721-how-chinas-innovation-drives-the-transformation-of-thailands-economy)󠁿

 1. **Early Entry and Investment**: Chinese automakers, particularly BYD, entered the
    Southeast Asian market early and invested heavily in local production facilities.
    For instance, Chinese car makers have committed over $1.44 billion to set up new
    EV production facilities in Thailand.
 2. **Technological Prowess and Cost Advantages**: Chinese EV companies leveraged their
    advanced technology and cost advantages to outpace competitors. This includes offering
    more affordable EV options compared to Western and other Asian brands.
 3. **Strategic Partnerships**: Chinese companies formed distribution partnerships 
    with large local conglomerates, facilitating easier market penetration and wider
    distribution networks.
 4. **Government Incentives**: Several Southeast Asian countries, including Thailand
    and Indonesia, rolled out incentives to stimulate EV demand and attract new investments.
    These incentives were a significant draw for Chinese automakers looking to expand
    their market presence.
 5. **Rising Demand for EVs**: The demand for EVs in Southeast Asia surged dramatically,
    with countries like Thailand, Vietnam, Indonesia, and Malaysia experiencing significant
    year-on-year growth in EV sales. This demand was largely met by Chinese companies,
    which saw their market share in the region jump from 38% in 2022 to nearly 75% 
    in 2023.
 6. **Geopolitical and Economic Factors**: The region’s reliance on imported crude 
    oil and the financial burdens associated with it made electrification an attractive
    alternative. This economic context further fueled the demand for EVs, benefiting
    Chinese automakers.

Overall, China’s strategic investments, technological edge, and ability to capitalize
on local incentives and rising demand have enabled it to dominate the Southeast 
Asian EV market.

Trade tensions have escalated between China and the United States and the European
Union due to measures aimed at curbing Chinese dominance in the EV market, including
tariff hikes on Chinese EV imports.

Western nations, particularly in Europe, are imposing tariffs on Chinese electric
vehicle (EV) manufacturers due to concerns over subsidies and market competition.
In response, Chinese companies are expanding their influence in developing markets,
especially in Southeast Asia, where demand for EVs is rising rapidly. This region
is becoming a key target for Chinese EV manufacturers, leveraging their established
technology and competitive pricing to capture significant market share.

## **The development of the EV industry globally**

The global development of electric vehicles (EVs) has been marked by significant
growth and evolving trends. Nearly one in five cars sold in 2023 was electric, with
sales nearing 14 million units.

This represents a 35% increase from 2022, highlighting the robust demand for EVs.
The majority of these sales occurred in China, Europe, and the United States, which
together accounted for 95% of global EV sales.

The EV market growth has been driven by strong domestic policies and incentives,
even as national subsidies for EV purchases were phased out. Europe and the United
States also saw substantial increases in EV adoption.

The market dynamics in 2024 have been influenced by several factors. The financial
performance of EV companies has been strong, although there has been notable volatility.
Companies like Tesla and BYD have seen fluctuations in their stock prices due to
supply chain disruptions and increasing competition. Despite these challenges, the
overall market capitalization of EV companies has grown significantly since 2019.

Investment in the EV sector has also been robust, with carmakers securing direct
deals with battery manufacturers and mining companies to ensure a stable supply 
of critical minerals. This trend is expected to continue as the demand for EVs and
their components rises.