China to cement grip in Southeast Asia EV market

The International Energy Agency reported that China accounted for nearly 60% of new electric car registrations globally in 2023, Europe at 25%, the United States at 10% and the rest of the world for the remaining 5%.

While Chinese automakers have entrenched their position in their homegrown market for many years, they have started to spur expansion to other regions.

As a result, China experienced a significant surge in the export value of its battery electric vehicles, which quadrupled from US$8.59bil in 2021 to US$34.13bil by 2023.

Chinese EV manufacturers, such as BYD, SAIC Motor Corp-owned MG, Nio, GAC Motor, Li Auto, Geely and Chery, collectively took up 53% of the global market share for EVs in 2023. The same year, Chinese automaker BYD surpassed Tesla as the world’s best-selling EV brand.

Fierce competition in the EV market has prompted governments in several jurisdictions, particularly the United States and the European Union (EU), to enact measures to curb Chinese dominance and protect their domestic industries.

On May 14, Washington unveiled tariff hikes on some goods imported from China, including a quadrupling of import duties on Chinese EVs to 100%. The Biden administration stated that the new measures aimed to protect American manufacturers and their workers.

The global electric vehicle (EV) industry landscape has intensified, with China solidifying its position as the world champion in the EV space.

The International Energy Agency reported that China accounted for nearly 60% of new electric car registrations globally in 2023, Europe at 25%, the United States at 10% and the rest of the world for the remaining 5%.

While Chinese automakers have entrenched their position in their homegrown market for many years, they have started to spur expansion to other regions.

As a result, China experienced a significant surge in the export value of its battery electric vehicles, which quadrupled from US$8.59bil in 2021 to US$34.13bil by 2023.

Chinese EV manufacturers, such as BYD, SAIC Motor Corp-owned MG, Nio, GAC Motor, Li Auto, Geely and Chery, collectively took up 53% of the global market share for EVs in 2023. The same year, Chinese automaker BYD surpassed Tesla as the world’s best-selling EV brand.

Fierce competition in the EV market has prompted governments in several jurisdictions, particularly the United States and the European Union (EU), to enact measures to curb Chinese dominance and protect their domestic industries.

On May 14, Washington unveiled tariff hikes on some goods imported from China, including a quadrupling of import duties on Chinese EVs to 100%. The Biden administration stated that the new measures aimed to protect American manufacturers and their workers.

The recent Washington regulations will add to many protectionist actions, further escalating tensions between the two economic superpowers.

In response, China’s Commerce Ministry stated that the country “firmly opposes” the tariff hike and will take measures to safeguard its rights and interests.

On June 12, the EU subsequently planned to implement a similar measure by imposing tariffs ranging from 17% to 38% for Chinese EVs following the bloc’s investigation of an anti-subsidy probe last year.

In contrast to the US blanket policy that applies to all EV automakers from China, the EU’s rule imposes a provisional increase in tariffs individually for certain manufacturers.

For instance, BYD will face a 17.4% tariff, while Geely and SAIC will be subject to import tariffs of 20% and 38.1%, respectively.

Brussels’ actions certainly sparked ire in Beijing, with the Chinese commerce ministry calling the decision “naked protectionist behaviour”.

Europe plays a crucial role in China’s ambition to dominate the global EV market as the continent is the largest overseas market for Chinese EVs.

According to data from the People’s Republic of China General Administration of Customs, compiled by The Atlantic Council, the value of Chinese EV exports to EU countries was US$ 13.46 billion in 2023, representing 39% of the country’s total export value that year.

With Western countries aiming to distance themselves from China by imposing levies on its EV automakers, Chinese manufacturers are set to expand their presence in other emerging markets, particularly Southeast Asia, where demand is sharply growing and China’s foothold is already strong.

Amid ongoing trade tensions between China and the United States, including its allies, Southeast Asia has become a promising battleground for global EV brands, including the region’s homegrown automaker, Vietnamese VinFast.

South-East Asia experienced a significant triple-digit surge in EV demand last year, with total sales increasing by 894% year-on-year in late 2023. In recent years, Chinese companies have tapped into this burgeoning market and rapidly risen to dominate it.

In 2022, China’s EV market share in Southeast Asia only reached 38%, but it continues to grow.

A recent report by Counterpoint Research revealed that Chinese brands accounted for over 70% of EV sales in Southeast Asia this year, with BYD leading the market. Chinese brands have successfully overtaken Japanese and South Korean brands for the EV space, which have long dominated Southeast Asia’s internal combustion engine car market, as the latter two countries lag in the transition to EVs.

Price competitiveness has given Chinese EVs an advantage, enabling them to win over their more expensive Western competitors and Asian-brand counterparts. With price tags for low-end models starting at US$12,000 and supported by incentives offered in several countries, including Indonesia and Thailand, Chinese brands are particularly appealing to Southeast Asian customers.

In an attempt to further solidify Beijing’s position in the region, several Chinese automakers have begun investing in production facilities throughout Southeast Asia, one of the world’s fastest-growing regions with a population of more than 680 million.

In Indonesia, Chinese firm BYD has invested US$1.3bil for an EV factory in West Java province that is slated to start operations in January 2026. In Malaysia, Geely has partnered with Malaysian Proton to invest US$ 10 billion to expand its presence in South-East Asia.

In Thailand, another Chinese automaker Chery has also planned to establish a factory in Rayong province aiming to produce 50,000 BEV and hybrid EV units in the first phase of production. Thailand’s Board of Investment also noted that there have been 26 investment projects related to EV manufacturing and assembling facilities from 19 companies in Thailand totalling more than 80 billion baht or US$2.1bil.

While the uptake of EVs remains slow in Southeast Asia, collaborative strategies between automakers and the governments by providing incentives and improving EV infrastructure will be crucial to encourage EV usage in the region.

As Beijing continues to forge close ties with both Asian collectively and its constituent countries, South-East Asian nations have welcomed China’s intention with a shared vision to increase EV adoption amid global shifts toward sustainable mobility.

Although China faces roadblocks in the United States and European Union due to rising geopolitical tensions and trade wars, its continued focus on Southeast Asia will further strengthen its foothold in the region’s EV industry, where Western counterparts are grappling to take a slice of the market share.

Rafi Adis Subarna

The Jakarta Post

Asia News Network

Rafi Adis Subarna is an analyst at KRA Group, a Southeast Asia-based public affairs and political risk consultancy. The views expressed here are the writer’s own.