Tesla eyes Southeast Asia’s booming EV market as a major place of growth but faces competition from BYD

Rohan Patel, vice president of public policy and business development at Tesla, recently took to X (formerly Twitter) to congratulate one of the first owners of the Model Y in Malaysia. In his post, he also said “Malaysians are going to really love the Model Y, and our Tesla Malaysia team is motivated to create the best ownership experience possible.”

“Southeast Asia will undoubtedly be a major place of growth over the coming years in battery storage and electric vehicle adoption,” added Rohan. This is an indication that Tesla is pushing to grow its customer base in a region with a booming EV market to offset slowing demand in the company’s two largest markets: China and the United States.

As reported by Reuters, data from the China Passenger Car Association (CPCA) revealed Tesla sold 60,365 China-made vehicles in February this year, which is 19% from a year earlier and the lowest volume since December 2022. Earlier in January, Tesla CEO Elon Musk reportedly said Chinese automakers were the “most competitive” and “if there are no trade barriers established, they will pretty much demolish most other car companies in the world. They’re extremely good.”

Huge congrats @1stPrincipleInv, and thank you for your support! Malaysians are going to really love the Model Y, and our @Tesla_Malaysia team is motivated to create the best ownership experience possible.

Southeast Asia will undoubtedly be a major place of growth over the… https://t.co/sSnnKy5amI

— Rohan Patel (@rohanspatel) March 12, 2024

According to Counterpoint Research, Southeast Asia was the “hottest major EV market globally” in Q2 2023, with sales in the region growing 894% from Q2 2022. Various incentives from governments have helped drive up EV adoption in the region, with EVs making up 6.4% of all passenger vehicles sales in the quarter, up from 3.8% in the preceding quarter.

Chinese automakers stand in the way of Tesla gaining more of a foothold in Southeast Asia, with BYD selling more than 26% of all EVs in the region in Q2 2023, while Tesla accounted for about 8%, reported the Hong Kong-based industry analysis firm. While Tesla adopts a direct-to-consumer approach, BYD has partnered with large, local conglomerates that have allowed it to expand its reach and navigate government regulations in the region.

The EV sales pie in the region is expected to grow substantially over the coming years, with Ernst & Young reporting sales across ASEAN-6 markets (Indonesia, Malaysia, Thailand, Vietnam, Philippines and Singapore) are expected to hit up to USD100 billion (about RM470 billion) by 2035 from sales volume of 8.5 million units.

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