Malaysian Vincent Hor recently bought a BYD Atto 3 to “show off,” joining the growing number of Southeast Asian consumers purchasing electric vehicles.
The region has embraced the influx of Chinese automakers offering attractive deals to gain market share.
“It offers advanced features such as voice commands and a rotating touchscreen with low maintenance,” said Hor, a 41-year-old businessman in Kuala Lumpur who bought the battery-powered SUV in June at a steep 27% discount from the catalog price.
After finding success in their home country but running into intense competition and significant overcapacity, Chinese automakers are now pushing pure EVs and hybrid cars abroad to first-time owners like Hor. He accepts that his car will probably have a shorter lifespan than a gasoline car, despite its eight-year warranty.
“It’s just like a smartphone, it needs to be replaced after a while to keep up with the latest technology,” Hor said.
The region’s EV sales grew 79% year-on-year (YoY) in the first half of 2025, fueled by aggressive capacity ramp-ups and localized assembly by Chinese brands, said Liz Lee, an associate director at consultancy Counterpoint Research. These brands expanded model availability, lowered entry prices, and benefited from strong domestic demand in Vietnam, where local brand VinFast has racked up substantial sales.
Over the same period, Chinese original equipment manufacturing (OEM) accounted for more than 57% of total EV sales in the region, recording 67% YoY growth, according to Counterpoint’s analyst Abhik Mukherjee. Nearly 18 Chinese OEMs are operating in the region, with BYD, GAC Group, Chery, SAIC Group, Wuling, Chang’an Automobile, and Great Wall Motor leading the market.
But as Chinese automakers are duplicating the aggressive pricing strategies seen in China in Southeast Asia—cutting between 8% and 20% off original prices, according to Nikkei Asia‘s research—their rise is raising concerns about sustainability and the impact on local economies.
“The price war is not beneficial to anybody, [as] it is impacting manufacturers, buyers and resellers,” Dennis Chuah, president of the Electric Vehicle Association of Malaysia, told Nikkei Asia. Chuah added that such practices erode buyers’ confidence as car values decline.
“The question is, for some EV makers, can they sustain themselves if the company isn’t making a profit five years later? What will happen to after-sale services if the company no longer exists? We need to protect our buyers,” he said.
Even so, Chinese automakers are aggressively capitalizing on EV incentives rolled out by Southeast Asian governments to reduce carbon emissions.
About two hours’ drive from Bangkok, Chonburi has become a key storage hub for Chinese-made vehicles, with land near Laem Chabang Port—the country’s largest commercial port—used since 2022 to hold units both inside the port and in fenced-off stockyards along major roads.
The vehicles, often without license plates and uncovered in the tropical rain and heat, underscore Thailand’s growing role in the regional EV supply chain. A shipping industry source noted that EV imports from China peaked in 2023 but have remained steady into 2024 and 2025, as automakers target overseas demand. “Many of these vehicles, including those produced in Thailand, are being parked in areas surrounding the port,” he said.
“The presence of Chinese EVs in [Thailand] has become increasingly significant since the second quarter,” said Naruedom Mujjalinkool, vice president of the research department at Krungthai XSpring Securities (KTX). He noted that EV sales accounted for approximately 18% of total vehicle sales in the first seven months of the year, a notable growth of 12% from the previous year.
In Singapore, BYD was the bestselling car brand, surpassing Toyota in the first half of 2025.
In Vietnam, however, VinFast was the only Southeast Asian brand to outsell Chinese EVs in 2024, dominating the market with 87,000 units sold, 2.5 times more than the previous year. Sales continued to surge in the first half of 2025, reaching 67,569 units, tripling YoY.
Many car dealers are undercutting their rivals, even if it means making little profit, observers said.
Malaysia’s Hor was able to buy his SUV at such a sharp discount because it was sold on a secondhand car platform, which claimed his was a “demo” car that had previously been used in a BYD sales outlet.
In Thailand, some dealers sell cars left over from Bangkok’s biannual motor show at around 15% less.
“Good deals at motor shows are nothing new, but dealers are complaining about undercutting,” said a Thai automotive industry veteran who declined to be identified. “People are buying cars and seeing massive discounts offered to other visitors just a few days later at the same show.”
A BYD distributor came under investigation by the Thai consumer watchdog last year following a complaint but was cleared of wrongdoing over its discount practices, Reuters reported.
On their home turf, automakers saw an average price cut of RMB 23,000 (USD 3,220), or a 12% reduction from the original price, in the first half of 2025, according to the China Passenger Car Association.
With their competitive pricing and sophisticated in-car features, Chinese players are eroding the longstanding lead of Japanese carmakers, whose cautious approach to electrification has left gaps in the market.
Japanese OEM in the ASEAN-6 nations (Indonesia, Malaysia, Thailand, Vietnam, the Philippines, and Singapore) fell to 63.9% in 2024 from 68.2% in 2023, according to PwC.
Japanese car brands once commanded over 90% of the Thai and Indonesian markets.
While Chinese automakers in Thailand are still cutting prices and offering incentives, industry experts said they are less concerned about further discounting.
KTX’s Mujjalinkool said he found a lower frequency of price reductions for EVs compared with the previous year, suggesting that companies have reached an appropriate level of discounting. “Furthermore, new car models being launched are also starting to be priced more in line with the overall market,” Mujjalinkool added.
Despite the price war in Southeast Asia, Chinese companies are still able to sell cars at much higher prices in the region than domestically. For example, BYD’s Seal 05 plug-in hybrid sedan sells for roughly 50% more than in China.
Many Chinese OEMs see exports as more profitable than cars they sell domestically, where margins are paper-thin. In the first seven months of 2025, China shipped 3.68 million vehicles abroad, of which one-third were EVs, a segment that grew 84.6% from a year ago, according to the China Association of Automobile Manufacturers.
In the longer term, competition could intensify as more Chinese brands enter Southeast Asia and set up production capacity in Thailand and Indonesia, said Vincent Sun, senior equity analyst at Morningstar.
BYD began exporting EVs made in its Rayong factory to Europe in late August. The company is also constructing a USD 1.3 billion manufacturing plant in Indonesia. China’s Chang’an and GAC Motor have started production in Thailand, while SAIC-GM-Wuling already operates factories in Indonesia and Malaysia.
In response to the Chinese onslaught, Japanese car brands are shifting their strategy to focus more on manufacturing hybrid vehicles and adjusting prices, Naruedom said.
Some Japanese car manufacturers are also scaling back operations in Thailand. Honda Motor announced last year that it will cease production at its Ayutthaya plant this year, consolidating output at its Prachinburi facility. Similarly, Suzuki Motor said it will shut an assembly plant by 2025 amid sluggish sales. Meanwhile, Nissan announced a sweeping restructuring strategy affecting its production in Thailand and other markets as part of the lossmaking company’s turnaround plan.
However, Eugene Hsiao, head of China equity strategy at Macquarie Capital, said Japanese automakers will retain a key advantage in dealership, servicing and financing, areas that Chinese rivals cannot quickly replicate. He noted that EV market penetration in the region is still relatively small, and charging infrastructure remains insufficient for wider adoption.
“In the near-term, we believe buyers of Chinese EV are mostly early adopters with interest in tech features, rather than those looking to directly substitute mass market Japanese ICE (internal combustion engine) vehicles,” Hsiao said.
Chinese car manufacturers will account for 30% of worldwide vehicle sales by 2030, with the largest growth anticipated in emerging markets such as Southeast Asia, the Middle East, Africa, and South America, according to a projection by consultancy AlixPartners in April.
Yet, the consultancy expects consolidation in the sector, projecting that only 15 of China’s 129 EV brands in 2024 will remain financially viable by 2030.
Neta is an example of a struggling company. The financially stressed Chinese EV maker has slashed the number of showrooms and service centers in Thailand, its largest market, to just three from over ten, leading to complaints from owners about slow repairs, long waiting times for parts, and dealers refusing to offer services. Some dealers have also cut prices by as much as half to clear inventory, but sales failed to pick up, according to media reports.
For buyers that have bagged a bargain like Malaysia’s Hor, though, what matters now is to enjoy the electric features of his Atto 3:
“I’m just following the trend to show off, even if I might take a loss later.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.