Favorable regulations, local brands and penetration of Chinese carmakers will drive electric vehicle (EV) sales higher in ASEAN, Maybank Investment Bank said Thursday.
The research house said in a note that ASEAN companies that are partnering with Chinese car makers for manufacturing and sales and battery value chain companies, could benefit from the EV rush, backed by battery minerals/ecosystem, a large automotive production base and robust demand.
According to Maybank, ASEAN is witnessing a pick-up in electric car sales, mainly in Malaysia, Indonesia and Vietnam.
For Malaysia, the country’s fully electric car sales surged 142 percent year on year to 10,663 units for the first half.
The share of fully electric cars was 2.6 percent of total car registrations for the first half versus 1.6 percent in 2023.
Meanwhile, hybrid car sales were at 11,722, up 22 percent year on year.
According to Maybank, Malaysia is planning to cut its fuel subsidies, which could fuel demand for EVs.
“The Malaysian government is contemplating reduction/removal of fuel subsidy. Any action on this will deliver the much-needed push for EV adoption as it will make EV more competitive to gasoline on a total cost of ownership (TCO) basis,” it said.
As for Indonesia, the country’s fully electric car sales more than doubled year on year to 11,943 units in the first half.
Its share of total cars sold increased to 4 percent versus 2 percent a year ago.
The country’s hybrid car sales increased 47 percent year on year to 24,397 units, forming 8 percent of total car registrations as compared to 4 percent in the first half of 2023 and 7 percent in 2023.
It is noted that at the start of 2024, the Indonesian government extended the sales tax discount (lowering tax from 11 percent to 1 percent) on fully electric vehicles until end Dec 2024 for cars with a minimum 40 percent local content.
It also suspended import duty on fully EVs until end-Dec 2025.
Chinese automakers such as BYD, Chery, SAIC, GAC Aion, etc and Vietnam domiciled VinFast are setting up facilities in Indonesia.
Singapore, on the other hand, also saw its fully electric car sales soar 218 percent year on year to 6,019 units, forming 32.4 percent of total car sales versus 14.4 percent in the first half of 2023.
Hybrid car sales in the country were higher by 63 percent year on year to 8,922 units, at 48.1 percent of total sales as compared to 41.9 percent in the first half of 2023.
In Thailand, the country’s fully electric car sales increased 41.8 percent year on year to 26,377 units in January to April this year.
About 50 percent of the sales number was already recorded in Jan 2024, since then sales have slowed down.
It is noted that the overall car market has seen a slowdown in Thailand with sales decreasing 24 percent in the period from January to April.
The Thai government has set a target of sale of 175,000 cars in 2024.
As per Electric Vehicle Association of Thailand (EVAT), the country has been experiencing oversupply of Chinese EVs over the last couple of years, driven by tax benefits for imports.
Most large Chinese carmakers are setting up capacities totaling about 700,000 units per annum in Thailand, which will fully operate within the next 12 to 24 months.
At the same time, many Japanese carmakers are shutting facilities for gasoline cars.
Suzuki has announced shutting down its Thailand plant by end 2025 and Honda has announced closure of its facility in 2025.
As for the Philippines, the country’s electric vehicle sales data is not available.
The National Economic and Development Authority (NEDA) Board has announced tax breaks available to fully electric vehicles will be extended to two and three wheeled battery electric vehicles, hybrid electric vehicles, and plug-in hybrid electric vehicles (PHEVs), including jeepneys, buses and nickel metal hydride accumulator batteries until 2028.
The government aims to reach 311,700 EVs by 2028 under the business-as-usual scenario, along with establishing 7,300 EV charging stations from 2023 to 2028.
As of end April 2024, there were about 563 registered charging stations.
Meanwhile, global electric car sales increased 24 percent to 6.7 million in the first half, forming 21 percent of total car sales.
The sale of fully electric cars slowed to 13.9 percent year on year whereas plug-in hybrid electric cars accelerated by 59 percent year on year.
Additionally, hybrid car sales also witnessed faster growth.
“We believe this is mainly due to saturation and end of EV subsidy in Europe, weakness in United States, lack of charging infrastructure and range anxiety,
“Recent tariff increases on China-made cars in the United States and Europe will have a further impact,” said the research house.
It is noted that EV cars formed 21 percent of the total car sales globally versus 22 percent in the first half of 2023 and 23 percent in 2023.
China dominated the market, accounting for 65 percent of EV sales, followed by the United States at 11 percent.
As a region, Europe and United Kingdom accounted for about 19.3 percent.
Cited International Energy Agency (IEA), Maybank forecasts global EV sales to continue to rise and could reach about 17 million in 2024, an increase of 21 percent.
It is noted that Tesla continues to lead the fully electric car market followed by BYD.
For the first half, Tesla reported a 6.5 percent year on year decline in car sales to 830,766 units as compared to a 17 percent year on year increase in BYD car sales to 726,153 units.
BYD also offers PHEVs, which went up 39.5 percent year on year in the first half to 880,992 units.
For BYD, ex-China sales totaled 13 percent of its sales in the first half versus 6 percent in the first half of 2023 and 8 percent in 2023.
Maybank also noted, hybrids cars, powered by gasoline engine but also have battery backup, are regaining popularity globally as people believe that it is a good first step towards fully electric cars as it offsets range anxiety issues faced by electric cars due to lack of charging infrastructure.
In the first half, hybrid car sales rose 17.7 percent to 4.3 million units as compared to a 10.3 percent year on year growth in fully electric cars.
Hybrids formed 14 percent of total car sales globally versus 13 percent for fully electric cars.
Japan is the leader in this category, clearly showcasing where the Japanese car makers on focusing on.
However, Japanese car makers are losing ground to the Chinese due to their slow progress on fully electric cars, said the research house.
The United States, on the other hand, is the second-largest market in terms of hybrid car sales.
It is noted that recently, Nissan cut its 2024 retail sales forecast due to market shift towards hybrids in the United States.
In India, the Japanese automakers, namely Suzuki and Toyota, have been lobbying to bring hybrids at the same rate of tax as EVs.
Currently, EVs are taxed at 5 percent, hybrids at 43 percent and other cars at 18 percent to 43 percent in India depending on the power and length of car.