Chinese EV Makers Expand Global Footprint, Targeting Southeast Asia
Chinese electric vehicle (EV) companies are experiencing a period of rapid growth and global expansion, with Southeast Asia emerging as a key target market. BYD emerged as a leader last year.
Employees conduct inspections at a BYD production plant in Thailand. (Photo: Reuters/Yonhap News)
BYD, China’s leading EV manufacturer, claimed the top spot in global sales, selling 4.478 million vehicles, a 43.9% increase year-over-year. This performance surpassed the sales of Tesla, which increased by 5.4% to 1.988 million units. Geely Group, another Chinese EV company, secured third place with sales of 1.355 million units. Chinese-made electric vehicles are gaining momentum.
While a significant portion of these sales remains within the domestic Chinese market, Chinese EV companies seek to broaden their global reach. They are actively pursuing expansion strategies in emerging markets like Brazil, as well as established markets in the United States and Europe.
Southeast Asia: A New Frontier
Southeast Asia, including Vietnam, presents both opportunities and challenges for Chinese EV manufacturers. BYD’s entry into Vietnam in July of last year exemplifies this push. The growing demand for eco-friendly cars among younger consumers is driving the exploration of Southeast Asia by Chinese EV companies.
Southeast Asia, with its demographic of middle-class and higher consumers seeking improved lifestyles, is a promising market. It is likely a new market for China’s EV companies to expand. This is partially due to the recent U.S. tariffs and low sales in Europe.
Challenges in the Southeast Asian Market
Despite these opportunities, several hurdles remain. Brand loyalty is a significant factor, as consumers in Southeast Asia, notably in Vietnam, often prefer established brands. Japan’s Toyota, Nissan, and Honda, for example, held approximately 68% of the Southeast Asian car market in 2023. Vietnam has its own EV company, VinFast, which is facing strong competition from Chinese EV companies. With the introduction of its entry-level electric vehicle costing around $11,700, VinFast has a lead in the market. Vietnamese people are still skeptical of Chinese brands due to historical tensions.
A BYD electric vehicle displayed at the Shanghai International Motor Show. (Photo: AFP/Yonhap News)
Other challenges include high prices and insufficient infrastructure. The cost of EVs remains a barrier, and unreliable power supply and a lack of charging stations are obstacles to widespread adoption. Government subsidies are in place in some areas, namely Thailand. However, EV sales don’t reflect the subsidies, and sales have dropped year over year.
Strategies and Outlook
Chinese EV companies are actively working to overcome these challenges and gain a stronger foothold in Southeast Asia. Initiatives include substantial investments in production facilities. BYD is constructing a plant worth $1.3 billion in Java, Indonesia, and Chinese manufacturers like Cherry Motors will try to produce vehicles in Thailand. GAC Aion has taken out advertising space in Thailand’s Suvarnabhumi International Airport.
“Southeast Asia is a market where 250 million motorcycles run together when there are about 5 million cars on the road,” said Ron Jeong, a partner at Roland Burger, a global consulting firm. “Chinese electric vehicle companies that want to enter Southeast Asia will be able to succeed only when they effectively solve different cultural, language, and regulatory system problems.”
Related industries predict that Chinese-made electric vehicles could increase their share of the Southeast Asian auto market to about 13% by 2030, up from only 6% in 2023.
