28 Jul 21

SEA demand for EVs challenges Japanese dominance

The strategic decision by Japanese manufacturers – led by Toyota – to focus on hybrid rather than on electric, seems to generate more and more frustration with especially Thai and Indonesian authorities. Chinese and Korean OEMs see an opportunity to steal market share.

Discover how the major carmakers are preparing for the next fleet and mobility frontier in the on-demand video section of the 2021 Global Fleet Conference.


Electrification in Thailand has not yet properly kicked off. Less than 1500 EVs have been delivered in 2020, most of them Chinese (SAIC). Nonetheless, Thailand was amongst the first countries in SEA (after Singapore) to link taxation with emissions – perhaps not so much because of sustainability reasons as it was because of the country’s dependence on oil imports.

Things are changing now, and the Thai government is looking at OEMs to transform the local automotive ecosystem. Impressive incentives are being put in place, such as an 8-year corporate tax exemption for EV production initiatives.


Looking at it from a different angle, Indonesia also wants to become a major EV producer; the country holds massive reserves of nickel, which are being picked up by Korean and Chinese investors. In the spirit of developing short supply chains, Hyundai is investing in the nickel mines, battery production facilities and car manufacturing in Indonesia.

Japanese manufacturers are again not aligned with the enthusiasm of their competitors and seem to have missed a unique opportunity to benefit from Indonesia’s push for electric.


And here’s where things have gone wrong: Toyota has been dictating its resistance towards full electric, promoting hybrid and hydrogen as the right way forward. In their communication with the Thai government, the Japanese Chambre of Commerce repeated that a shift to EVs will not solve the country’s reliance on energy import. In addition, Thailand nor Indonesia have nearly sufficient charging infrastructure to deal with a massive transition to EVs.

What will the future bring?

Toyota is defending its strategic decision (hybrid and hydrogen) but losing opportunities and eventually market share in South-East Asia. Even in a scenario of EV failure, Chinese and Korean manufacturers will have acquired a part of Toyota’s market share – this percentage might be lost forever.

For the Thai and Indonesian fleet managers however, the option to select affordable EVs will help their global stakeholders to reach electrification and sustainability goals. The Chinese and Korean manufacturers will have to go through the learning process of dealing with corporate customers, but this process will take less time than it will take the Japanese manufacturers to deliver the right product.  

Picture Credit: Shutterstock

Authored by: Yves Helven