Chinese electric vehicles are selling like hotcakes in Southeast Asia, but there are still several hurdles to overcome before they can become the dominant force.

Now, the whole world must recognize China's status as the global leader in new energy.

After all, a total of more than 17 million electric vehicles were sold globally last year, and Chinese brands accounted for 62% of them. Especially in Southeast Asia, an emerging market for new energy vehicles, news about "Chinese cars dominating the market" has become quite common recently.

"93% of electric vehicles in Indonesia are made in China!"

"In the first half of 2025, Chinese electric vehicles accounted for 35% of the market share in Malaysia, firmly holding the top position in pure - electric vehicle sales."

"Wuling Bingo exported 35,000 vehicles to Thailand in a single quarter, with a market share of over 25%. Wuling has completely dominated the Southeast Asian market."

...

But how long will it take for Chinese cars to dominate the world?

The reality is quite complicated.

Making rapid progress, but not yet achieving an overwhelming advantage

According to data from the China Association of Automobile Manufacturers, China's automobile export volume reached 5.859 million vehicles in 2024, a year - on - year increase of 19.33%. From January to April 2025, the export volume was 1.937 million vehicles, a year - on - year increase of 6.02%.

In the first half of this year, China exported 3.083 million vehicles, a year - on - year increase of 10.4%. Among them, the export volume of new energy vehicles was 1.06 million vehicles, a year - on - year increase of 75.2%.

The sales volume of Chinese - brand cars in the four major Southeast Asian markets of Indonesia, Malaysia, Thailand, and the Philippines increased by more than 50% compared with the same period last year.

As the largest automobile manufacturing country in Southeast Asia, Thailand has become a key area for Chinese car companies to layout. Therefore, since this year, Chinese car companies have significantly accelerated their entry into the Thai market.

At the recently held 46th Bangkok International Motor Show, Chinese automobile brands shone brightly. Among the 26 large - scale exhibitor seats, Chinese brands accounted for 10. Half of the top 10 pre - orders were from Chinese brands.

Bangkok Motor Show in April

If we have to choose one most representative enterprise, there is no doubt that it must be BYD.

Since BYD delivered its first batch of electric buses to the Thai market in 2013, BYD has accounted for nearly 40% of the electric vehicle market share in Thailand.

In fact, it's not just BYD. From January to May this year, among the top 15 newly registered pure - electric vehicles in Thailand, Chinese brands occupied 13 seats.

The top five were all occupied by Chinese car companies.

Image source: Autolifethailand Facebook

But being the new king of electric vehicles doesn't mean being the market leader.

According to an analysis by Bloomberg, from January to June 2025, the total global sales volume of new energy passenger vehicles was 7.72 million, with 2.449 million sold in overseas markets (31.7%). Among them, the overseas sales volume of Chinese automobile brands was about 310,000 (12.7%).

In summary, the real market share of Chinese new energy vehicles in the overseas market is only 4.0%.

Southeast Asia is still the home ground of fuel - powered vehicles.

According to data from PwC, the total number of automobiles in Southeast Asia in 2024 was about 70 - 80 million, among which new energy vehicles accounted for about 800,000 - 900,000, with an overall penetration rate of only 1% - 1.3%.

If only BEVs (electric vehicles) are calculated, the penetration rate is even less than 0.5%.

However, the good news is that data in a Bloomberg report indicates that the "foundation" of Japanese fuel - powered vehicles in Southeast Asia is starting to shake.

Since 2019, the sales volume of Japanese cars in Southeast Asian countries has been continuously declining: by 12% in Thailand, 6% in Indonesia, 5% in Malaysia, and a staggering 18% in Singapore.

It's true that the rapid growth of Chinese new energy vehicles in the Southeast Asian market is a real achievement and has also written an important chapter for the globalization of the Chinese automobile industry. However, impressive sales do not equal the establishment of market dominance. From the era of fuel - powered vehicles to the new stage of new energy vehicles, the competitive landscape in the Southeast Asian market is far from being finalized.

For Chinese electric vehicles to truly dominate the Southeast Asian market, an increase in sales is just the first step of "going global". To "go steadily", they still need to overcome several difficulties.

Brand building: the invisible influence is everywhere

For a brand, brand power is undoubtedly its most valuable intangible asset.

Robert W. Woodruff, the former CEO of Coca - Cola, once boasted, "Even if all of Coca - Cola's global factories were burned down overnight, the factories could resume operation within a month."

This is a true portrayal of a strong brand power.

Japanese cars (especially Toyota) have shaped strong user perception and brand awareness in the Southeast Asian market through decades of in - depth development.

In 1963, Toyota established its first overseas factory in Thailand, officially starting the history of Japanese cars occupying the Southeast Asian market.

By 2022, Toyota had captured nearly 45% of the Thai automobile market with sales of 282,700 vehicles, becoming the industry leader.

Product quality is obviously the cornerstone of building brand trust. However, Chinese brands face significant challenges in this regard.

Due to the lack of a mandatory vehicle scrapping policy and the generally long service life of vehicles, the second - hand car market in Thailand is very prosperous, and consumers also pay more attention to the durability and reliability of products.

However, the pre - research results of the J.D. Power 2024 Thailand New Car Club showed that the primary reason for consumers surveyed not to consider buying Chinese brands was their concern about product quality.

Image source: J.D. Power

It's not just in Southeast Asia. Previously, the Russian authoritative automotive media "AUTONEWS" also pointed out that Chinese cars are more prone to rust.

However, after sporadic cases are magnified on the Internet, they become a major concern for consumers when buying cars.

Overcoming the gap in quality perception is by no means an overnight task.

This requires Chinese car companies to adhere to the principle of "quality first" in the long run, strictly control the quality of products throughout their life cycle, so as to reverse market perception and enhance brand power.

Fortunately, nowadays, Changan's establishment of a research and development center in Thailand and SAIC MG's adaptive improvements according to local needs are all positive signs.

According to data from the J.D. Power Southeast Asia Report (2024), Chinese new energy vehicles are now accelerating to break the advantage of Japanese cars in the residual value rate in the Southeast Asian market. Among the top ten three - year residual value rates of electric vehicles in Thailand, Chinese brands account for 7 seats.

There is also the sales and service system

How to sell cars is also a key issue.

There is an interesting phenomenon. The per - capita income in Thailand is actually not very high, with an average monthly salary of only about 3,100 yuan in RMB. However, cars in Thailand are not cheap.

The Camry, which has a domestic guide price of 145,800 yuan in China, is sold for as high as 300,000 yuan in Thailand.

This raises a question: with such a low income and such a high car price, how are cars sold in Thailand?

The answer is loans.

Over the decades in Thailand, in order to provide financial support for car sales, major Japanese car companies have long mastered the art of auto finance.

Japanese brands such as Toyota have joined hands with local banks to provide Thai consumers with zero - down - payment car purchase plans, and loan approvals only take 2 hours.

For sub - prime credit customers, they use their own financial channels to help users obtain loans. Toyota's financial company even provides a credit period of up to 90 days to Southeast Asian dealers.

In contrast, some Chinese brands have gaps in the flexibility of financial plans, interest - rate competition, and the depth of cooperation with local financial institutions.

Zhang Yue, the co - founder of Malacheshi, pointed out at an industry seminar in June that in Indonesia, the loan approval rate for Toyota's second - hand cars reached 85%, while that of Chinese brands was only 37%.

This obviously raises the threshold and financial risk for consumers to buy cars.

The production workshop of Great Wall's new energy vehicle manufacturing base in Rayong Province, Thailand

With the change of consumption concepts, most consumers' demand for a product has now shifted from pursuing a single product function to a "full - life - cycle service experience".

To put it simply, it was "buying a product" in the past, but now it's "buying a product + service". However, in the Southeast Asian market, the coverage and efficiency of the after - sales service network of Chinese brands are still insufficient.

Thanks to more than 1,200 4S stores in Thailand, Toyota only needs 3 days for customers to wait for auto parts. In contrast, due to the lack of core components locally, Chinese brands often need to wait for imports, which significantly prolongs the after - sales service cycle.

An analyst from Differential Thailand, a Thai consulting company, pointed out, "The high - end brands of Chinese car companies are actually very competitive in terms of technology and price, and are highly accepted by young people in Thailand. However, whether they can compete with existing brands such as Lexus depends on the long - term reliability of after - sales service."

It sounds like the key to improving the efficiency of after - sales service lies in increasing the localization rate of components. So, how difficult is localization in the Southeast Asian market?

The most difficult part is localization

Thailand's requirement for localization is not just assembly in Thailand. It has set a high threshold: the localization rate of components must reach more than 40%.

However, most local suppliers in Thailand are concentrated in low - end processing (such as wiring harnesses and interiors), and core components such as battery cells and electronic control systems still mainly rely on imports.

Although Thailand already has the most complete automobile supply - chain system in Southeast Asia, with more than 650 automobile supporting factories, its high - end technology production capacity is still very limited, and the local electric vehicle industry chain and talent base are relatively weak.

Each car has almost tens of thousands of components, and the corresponding suppliers are extremely complex. Just testing the local localization rate requires a large amount of manpower and material resources.

Moreover, the cost of building factories in Thailand is also rising.

Industry insiders said that the price of industrial land in Thailand has soared from about 2 million baht per rai (1 rai is about 2.6 mu) in the early days to 7 - 10 million baht per rai.

Wu Jiaming, the vice - president of XPeng Motors, once said, "Localization may be a huge cost challenge for XPeng."

According to industry data, currently, Chinese car companies only have about 190 local suppliers in Thailand, while Toyota, a Japanese car brand, has more than 1,400. More importantly, 92% of the components in Toyota's Thai factories are locally sourced, while the core three - electric systems of Chinese brands still mainly rely on imports.

However, Japanese cars' achievements in Thailand today are not the result of one day.

As early as the 1960s, Japan entered the Thai market through the CKD (Completely Knocked Down) model. Over the following decades, relying on the model of "Toyota leading the way, and component suppliers following", it has driven 1,400 Japanese suppliers to settle in Thailand, accounting for 45% of local component enterprises, and formed a close - knit industrial alliance.

Although Chinese car companies started late and face many difficulties, they are also exploring overseas expansion paths that suit their own characteristics and accelerating the construction of a hybrid ecosystem of "Thai manufacturing + Chinese technology + regional support".

For example, BYD's Thai factory has led 12 Chinese cable supporting companies to invest in Thailand, forming a "goose - formation effect". Wuling has adopted the model of "completely knocked - down assembly + technical cooperation" in Indonesia, driving local suppliers to participate in battery module production... Driven by multiple car companies, many battery manufacturers such as EVE Energy, Sunwoda, and Honeycomb Energy have also built factories in Thailand.

Obviously, the localization of the supply chain in the Southeast Asian market is a systematic project for Chinese car companies: in the short term, they need to deal with compliance and cost pressures; in the medium term, they need to fill the gaps in technology and the industrial chain; in the long term, they need to rely on ecological co - construction and cultural integration to break through the deep - water area of localization.