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Asean to sustain EV growth amid global market slowdown

The electric vehicle car sales growth is expected to slow down in 2024 due to saturation in China and Europe, and uncertainty in the US.

Asean to sustain EV growth amid global market slowdown

Electric vehicle (EV) adoption in Asean will continue to increase due to favourable regulations, the launch of new models at lower prices by Chinese EV makers as well as a large automotive production base and significant demand in the region, said analysts.

Maybank Investment Bank Bhd (Maybank IB) said six markets reported a four-fold jump in fully electric (FE) car sales to 141,095, of which Thailand and Vietnam were the top two countries, forming 77% of the sales in 2023.

“Indonesia had FE car sales of 17,062, (+65%) year-on-year (yoy) and Malaysia saw 10,159 sold (+286%) yoy.

“Overall, FE share of car sales was 6.2% for Asean-6 markets in 2023 versus 1.6% in 2022,” it said.

Maybank IB said as more low-priced EV models are launched in 2024 and 2025, it expects Asean’s EV adoption rate to increase further.

“Another driver would be direct subsidies to buyers and the addition of charging points,” the bank said in a research note.

Maybank IB said regulatory push and cheaper EVs are the key to EV adoption, which is clearly visible in the EV adoption in Thailand.

“Thailand is offering cash subsidies to EV buyers as well as lower excise and import duty for original equipment manufacturers (OEMs) and the Thai government is also incentivising local manufacturing.

“Indonesia is offering duty cuts and pushing domestic manufacturing,” it said.

The investment bank said the other way to push EV sales would be to increase the prices of petrol by reducing subsidies, which can be adopted by Malaysia.

“Finally, cheaper EVs, a game mastered by Chinese OEMs, will make it difficult for Japanese/Korean OEMs to compete in Asean markets,” it added.

Globally, it said the sales of electric cars reached 14 million in 2023, (+34%) yoy, making up 19% of total car sales.

“A forecast expects EV car sales growth to slow in 2024 to 22% yoy due to saturation in China and Europe, as well as uncertainty in the US ahead of the November presidential election and policy continuity.

“Weak sales by the leading EV companies in the first quarter this year confirms this concern,” it said.

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