EV sales value across ASEAN-6 expected to hit US$80B-US$100B by 2035

Electric vehicle (EV) sales value across ASEAN-6 countries are expected to hit US$80 billion to US$100 billion by 2035 from sales volume of 8.5 million units, a study by EY-Parthenon says.

The EY-Parthenon study assessed the EV value chain to understand the consumer awareness and sentiments as well as infrastructure and government policies across the ASEAN-6 markets to determine the market readiness, opportunities and potential for companies and investors.

EV adoption and its value chain have seen growing interest from consumers, governments, corporates and investors amid increasing climate concerns.

While Southeast Asia’s EV market has been rather nascent – accounting for less than 2% of global total sales – an EY-Parthenon study estimates that EV sales across the ASEAN-6 markets of Indonesia, Malaysia, Thailand, Vietnam, Philippines and Singapore will see a sharp growth – at a compound annual growth rate (CAGR) of 16%-39% between 2021 and 2035.

Sales growth is expected to occur across all three major EV segments of passenger vehicles, commercial vehicles, and two- or three-wheeler vehicles. 

Across the ASEAN-6, the key challenges in driving EV adoption are cost, availability of charging infrastructure and EV supply chain readiness. Singapore’s overall EV adoption readiness is the highest due to the growing awareness and market acceptance of EVs, emerging charging network and growing base for EV R&D, as well as strong government support through policies and incentives to enable infrastructure readiness. This is followed by Thailand, Indonesia, Vietnam, Malaysia and the Philippines. 

According to the study, EV sales volume across the six Southeast Asian markets are expected to hit about 8.5 million units by 2035.

Of ASEAN-6, Indonesia is expected to be the largest by volume, with estimated annual sales volume of 4.5 million units and sales value of US$26 billion - US$30 billion by 2035. This is followed by Thailand (estimated sales volume of 2.5 million units and sales value of US$35 billion - US$42 billion); Vietnam (estimated sales volume of 1 million units and sales value of US$6 billion - US$9 billion); Philippines (estimated sales volume of 750,000 units and sales value of US$7 billion - US$11 billion).

The expected growth of the region’s EV market looks to present opportunities for incumbents and new entrants looking to expand in Southeast Asia.

Such opportunities extend across the end-to-end EV value chain, from raw materials processing to charging infrastructure and software. The six key value pools include:

• Raw materials and processing
• Energy production
• Battery production, assembly and processing
• Vehicle manufacturing, retailing and aftermarket
• Charging infrastructure
• Charging management software

Four strategies for EV market players to succeed in ASEAN-6

As the region’s EV market is currently relatively nascent and underexploited, there are good opportunities for industry incumbents as well as smaller and new startups.

The EY-Parthenon study highlights four factors that are also critical to players seeking to succeed in the EV value chain in ASEAN-6 should address:

• Sector experience: Companies need to consider existing capabilities, assets and relationships that could give them a leg up in a related, new EV market.
• Scalability: Companies need to leverage financial and nonfinancial resources to launch EV-related products and services, and manage rapid growth.
• Funding: Companies must address this critical factor to overcome high initial acquisition costs and low initial utilization in many parts of the emerging ASEAN-6 value chain.
• Technological advantages: This gives a competition advantage in the EV-related market, such as software or specific battery and EV component manufacturing technologies.