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Mobility

EV’s Take on SouthEast Asia

Richieee
Last updated: April 25, 2024 2:36 am
Richieee
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7 Min Read
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This is a guest post by Richard Armstrong who is an early stage investor in many startups in both SE Asia and globally. Plus Richard has cofounded several companies.
Guest Author: Richard Armstrong

Contents
The surge of Electric Vehicles(EVs) in SEA is happeningThe Infrastructure ChallengeThe Rise of regional playersPrices are coming downStill some challengesConclusion

For the past few months i’ve gotten in the habit of reading the news again. Before that I was mainly just reading my X.com or Linkedin feeds to get my news.. but i’ve kind of gotten in the habit of just grabbing the top titles from Techzi’s daily newsletter.

And one thing I’ve noticed is that there is barely a week that goes by when there isn’t an EV company like Vinfast in the news.

For example recently I was reading this article about how Vinfast is putting up dealerships in Indonesia.

And here in Bangkok I already notice a fair amount of Teslas and BYD’s on the road. They seem to be very much in trend.

I’d also talked to a friend not too long ago that is in the habit of using HAUP, which is a service that allows you to rent cars by the hour. And you can pick them up and drop them off at lots of various locations around Bangkok.

Plus their selection of electric cars is pretty impressive. And so these cars need to be picked up and returned to their charging stations.

The surge of Electric Vehicles(EVs) in SEA is happening

It’s just an undeniable fact when you look around you in cities like Bangkok. And in my view this shift is not only a testament to the region’s commitment to sustainability but also reflects the global trend towards eco-friendly vehicles.

The adoption of electric vehicles in Southeast Asia has been significantly driven by proactive governmental policies. Countries like Thailand, Indonesia, and Singapore have implemented a range of incentives and subsidies to promote EVs.

Thailand, for instance, has laid out ambitious plans to produce only electric vehicles by 2035. And this reflects in the graph you see above where it had 59% share of the region’s EV vehicles in 2022.

Similarly, Indonesia is leveraging its vast nickel reserves crucial for EV batteries to establish itself as a global hub for battery production and electric vehicle manufacturing.

These governmental initiatives are often coupled with strict regulations on emissions and generous incentives for EV buyers, including tax reductions and grants.

Singapore stands out with its well-structured policies that not only encourage EV adoption but also aim to phase out internal combustion engines by 2040.

The Infrastructure Challenge

A major challenge in the adoption of EVs is the infrastructure required to support them. Primarily in terms of charging stations.

But this is rapidly changing.

Malaysia, for instance, has had a massive increase in the number of charging stations, which has helped reduce range anxiety among potential EV consumers.

Private sector involvement has also been pivotal. Companies like Greenlots, Charge+, and BlueSG have been instrumental in expanding the EV charging infrastructure across the region.

And this has been crucial in making EVs more accessible and practical for daily use.

The Rise of regional players

There have been a lot of new opportunities coming out of this shift towards EV’s… and local players have started to take advantage of it. For example in sectors like battery manufacturing, automotive parts, and renewable energy sources.

This shift is not only creating jobs but also helping the region’s economies diversify away from traditional industries.

Local automakers are adapting to this change. Companies like VinFast in Vietnam and Wuling Motors in Indonesia are beginning to focus more on electric models.

And they’re not just producing for the region.. but rather companies like Vinfast are selling their vehicles in the US.

Just recently I read this story about how VinFast has launched its VF DrgnFly e-bike in the US. The e-bike, priced at $2,599, can travel 68 miles on a single charge.

Prices are coming down

One major reason that a lot of folks say they don’t buy an EV yet is the high price. But over time we’ve seen these prices generally come down.

Particularly in China where there are lots of players like BYD creating very affordable cars.

I believe the SEA market will most closely follow the China market because a lot of these players are quite active in the region. And the majors like Tesla have never created nearly as large a base here as they have in the US.

So I think we will see cars become more and more affordable, and thus more folks jumping onboard.

Still some challenges

Despite the enthusiasm, there are still a lot of challenges.

These include the affordability of EVs, the need for more widespread and reliable charging infrastructure, and ensuring that electricity grids can handle increased demand.

Moreover, the environmental impact of battery production and disposal is a concern. Countries in the region need to establish regulations and facilities to handle the lifecycle of EV batteries responsibly.

Conclusion

I’m really liking how I see this whole EV push pan out here in SE Asia. I’m particularly excited how local players are stepping into the game and competing against the global giants.

Whereas in the gas-vehicle space the share of SE-Asian made vehicles in places like the US and Europe is miniscule… I think you will be seeing more and more players from SE Asia play a role in the EV space.

And they won’t just be copying Tesla. They’ll be innovating and putting their own SE Asian slant on their vehicles.

Next time I’m visiting the US.. don’t be surprised if you see me cruising on a Vinfast Drgnfly e-bike. Haha.

TAGGED:div5

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