The electric vehicle (EV) industry is set to invest $20 billion in South and Southeast Asia (SSEA), as automakers anticipate robust demand in these emerging markets, according to a recent S&P Global Ratings report. The report forecasts an annual growth of over 20% in EV sales from 2024 to 2026, driven by government support and expanded vehicle offerings.
Chinese automakers are notably expanding their EV production capacities in the region, expecting significant opportunities among SSEA’s large base of first-time car buyers who prioritise affordability. This strategic entry is anticipated to offset financial risks, though Japanese brands—leading in internal combustion and hybrid models—are likely to face pressure in market share from emerging EV players over the next few years.
The report also highlights Korea’s entry, with automakers partnering in Indonesia to establish EV production plants. These partnerships include LG Energy Solution Ltd. for battery cell manufacturing, marking a strategic move to develop an EV supply ecosystem locally. The Indonesian production sites are expected to serve the broader SSEA market, establishing the nation as a key production centre.
India’s EV market continues to grow rapidly, led by Tata Motors, which targets 18–20% market share in passenger EVs by 2030. Tata Motors is committing $1 billion for a new EV plant in Tamil Nadu, while parent company Tata Sons is backing a lithium-ion battery plant in Gujarat. This battery production facility, with a capacity of 20 GWh, is intended to strengthen India’s EV infrastructure.
The SSEA EV market is poised for fierce competition. The influx of global automakers is anticipated to lead to price wars and potentially oversupply, similar to trends seen in China. The report underscores that manufacturers will need to exercise financial caution while establishing local alliances to manage risks as SSEA matures as a global EV hub.
Source: S&P Global Ratings report
