Accelerating demand for electric vehicles is helping power Southeast Asia’s auto market, sparking sales from Indonesia and Malaysia to Thailand and Vietnam.
Nikkei Asia examined April-to-June sales data from the region’s major automotive markets. Combined sales rose about 11% from a year earlier, supported by strong growth in Indonesia, Malaysia, and Thailand.
Indonesia remained Southeast Asia’s largest auto market in the second quarter, with sales climbing 34% year on year to 227,545 vehicles. Government incentives and rising interest in Chinese EV and plug-in hybrid models helped fuel the rebound, even as competition intensified among Chinese automakers looking to expand their foothold in the market.
Chinese brands have rapidly gained market share. EV giant BYD captured about 5.3% of Indonesia’s overall vehicle market in the first half, while Chery’s Jaecoo accounted for roughly 4%, according to data from the Association of Indonesian Automotive Industries (Gaikindo). Chinese manufacturers are also broadening their product offerings beyond battery EVs, with companies including BYD and Chery launching plug-in hybrid models in a bid to attract consumers concerned about charging infrastructure and long-distance travel.
The rapid rise of Chinese brands and their expanding product lineups are drawing mixed reactions from consumers. Anastasia Putri Widjaja, a 33-year-old business owner in Jakarta, said BYD’s M6 plug-in hybrid model has emerged as her current preferred choice for her next vehicle purchase because it combines practicality with affordability in a seven-seat multipurpose vehicle.
“It’s ideal for long-distance travel, especially now that the price of nonsubsidized fuel has gone up,” she told Nikkei Asia. Widjaja said she has few concerns about Chinese brands as long as they offer reliable after-sales service, adding that Wuling remains an option for her because its quality has already been proven in the market.
Others remain more cautious. Andriawan Pratikto, a 30-year-old content creator from East Java, said he still prefers Japanese hybrid vehicles because of their extensive service networks and the availability of spare parts in smaller cities.
“If the car breaks down, can I be sure repair services will reach my town quickly?” he said, expressing concern over potential inconvenience. “When it’s finally time to replace my car, Toyota, Daihatsu, Mitsubishi, and Suzuki will still be my top choices.”
The growing presence of Chinese brands comes as Indonesia reviews a new EV incentive program. Industry minister Agus Gumiwang Kartasasmita recently said the government would prioritize “national brands,” although details of the policy have yet to be announced.
Malaysia recorded one of the strongest performances among the region’s major markets in the second quarter. Sales climbed 9.7% from a year earlier to 201,242 vehicles, prompting the Malaysian Automotive Association to raise its full-year forecast to sales of 800,000 from 790,000 previously.
The market is undergoing two notable shifts: growing demand for SUVs and accelerating electrification. SUVs remained one of Malaysia’s most popular vehicle categories. EV sales, meanwhile, surged 106% to 26,192 vehicles in the first half, overtaking hybrid sales of 25,590 for the first time. Combined EV and hybrid sales rose 69% to 51,782 vehicles and accounted for 13.4% of total sales, up from 8.2% a year earlier.
Much of the momentum came from Proton’s e.MAS lineup. The e.MAS 5 was Malaysia’s bestselling EV in the first half, while the e.MAS 7 ranked second. The performance suggests the appeal of EVs is beginning to move beyond early adopters in a market where hybrids have traditionally been seen as the more practical option.
Affordability appears to be a major factor. Roger Lee, a sales consultant at Proton’s showroom in Petaling Jaya, said the e.MAS 5 has accounted for about seven in every 10 purchases and is particularly appealing to younger urban buyers. Priced at roughly half the level of the larger e.MAS 7, the model has broadened access to EV ownership at a time when imported electric vehicles remain significantly more expensive.
“Many customers want to own an EV, but imported brands are often two or even three times more expensive,” Lee said.
The strong showroom demand appears to be translating into nationwide sales. Zhang Qiang, CEO of Proton’s EV subsidiary Pro-Net, said Proton had delivered 10,665 e.MAS 5 vehicles as of June 30, making it Malaysia’s best-selling EV, while the e.MAS brand had captured a 43% share of the country’s EV market.
“We believe Malaysia is approaching a tipping point where EVs are becoming a mainstream consideration rather than a niche choice for early adopters,” Zhang told Nikkei Asia.
A total of 164,883 vehicles were sold in Thailand in the second quarter, up about 10% from a year earlier, to extend its run of consecutive quarterly gains to five. Industry officials attribute much of the momentum to strong EV demand, which helped offset weakness in traditional vehicles.
The recovery, however, remains uneven. High household debt levels and strict vehicle loan approvals continue to weigh on consumer demand, particularly for pickup trucks, one of Thailand’s most important segments. At the same time, EV adoption has rapidly increased, reflecting the growing influence of Chinese manufacturers in the market.
Yet the challenges extend beyond domestic sales. Production slipped 1% year on year to 717,212 vehicles in the first half, while exports fell 8.3%, underscoring pressure on Thailand’s position as Southeast Asia’s largest automotive manufacturing hub.
Yeap Swee Chuan, CEO of Bangkok-based automotive parts supplier and car dealership Aapico Hitech, warned recently in an interview with Nikkei Asia that the long-term challenge is not weak demand but adapting to the rise of Chinese automakers, the technological advances of which are reshaping supply chains and competitive dynamics across the region.
Vietnam presents a different picture. Sales reported by Vietnam Automobile Manufacturers’ Association (VAMA) members rose just 2% year-on-year in the second quarter to 92,976 vehicles. But the market looks significantly larger once sales from non-VAMA member companies VinFast and Hyundai Motor, which partners with the local Thang Cong Group conglomerate, are included, bringing Vietnam’s effective vehicle market almost level with Thailand’s despite a much lower rate of car ownership.
Unlike most other Southeast Asian markets, Vietnam’s EV transition is being driven primarily by a domestic champion rather than foreign automakers. VinFast overtook Toyota Motor last year to become the country’s largest automaker and sold nearly 98,000 vehicles in the first five months of 2026.
The company’s rise has been supported by an extensive charging network operated by affiliate V-Green and strong consumer support for a homegrown brand. VinFast is also moving aggressively into the mass market through lower-priced vehicles. Its recently unveiled VF2, priced at about USD 7,100, is the company’s cheapest model yet and aims to broaden car ownership among middle-income consumers.
The Philippines, meanwhile, is lagging behind peers in ASEAN, or the Association of Southeast Asian Nations. Sales fell 14% to 97,988 vehicles year-on-year in the second quarter, making it one of the region’s weakest-performing markets. Nevertheless, the government is betting that stronger EV demand can eventually be translated into local manufacturing.
On July 30, President Ferdinand Marcos Jr launched a USD 1 billion incentive program to support domestic EV production, offering co-funding for investments and production. The move reflects a broader regional race to attract EV investment and build local supply chains, following policy initiatives in Thailand, Indonesia, and Vietnam.
Singapore remained one of Southeast Asia’s smallest car markets, with about 27,000 new vehicle registrations in the first half of 2026. Yet it has emerged as the region’s most advanced EV market, with electric cars accounting for around 62% of registrations, up sharply from about 40% a year earlier.
The city-state’s shift toward EVs has attracted automakers from China, Europe and elsewhere. BYD has consistently ranked as Singapore’s top-selling brand, while luxury manufacturers are also betting on growing demand for electric models.
“Customers are highly informed,” said Henrik Dreier, director of Singapore imports at Porsche Asia Pacific, as the company launched its new Cayenne Electric in July. “We believe the Cayenne Electric is perfectly suited to this market.”
The contrasting experiences across Southeast Asia underscore how the region’s EV transition is speeding up, albeit in different ways. Chinese brands have become an increasingly important force in Indonesia and Thailand. Malaysia is reaching a point where EVs are beginning to overtake hybrid options. Vietnam stands apart through the rapid ascent of national champion VinFast. And Singapore offers a glimpse of what a mature EV market in Southeast Asia could look like.
As EV adoption gains momentum, countries are increasingly looking beyond vehicle sales and toward manufacturing, supply chains and jobs. Reflecting that shift, the government in Manila, now seeking to play catch-up in that area, says its new program is designed to “position the Philippines as a regional automotive manufacturing hub.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.