ASEAN Electric Vehicle Market Set to Flourish in Future

Association of Southeast Asian Nations (ASEAN) countries are characterized by congested roads, which are overwhelmed with diesel- and gasoline-powered vehicles. As a result of this, air pollution levels are worsening in these nations. According to the World Health Organization (WHO), one-third of the deaths from air pollution are recorded in the Asia-Pacific (APAC) region, of which ASEAN is a major part. Thus, the surging concerns regarding the rising air pollution levels and the increasing incidence of respiratory diseases will encourage more customers to shift toward electric vehicles (EVs) from fossil-fuel-based vehicles.

Moreover, the increasing implementation of government policies encouraging the production and adoption of new-energy vehicles will strengthen the ASEAN electric vehicle market in the foreseeable future. For instance, in December 2019, Indonesia enacted an EV support policy to grant incentives to the investors of EV companies. This policy is targeted at EVs constituting 20% of the domestic automobile sales by 2025. Likewise, the National Automotive Policy (NAP) of Malaysia aims to promote the production of battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs) in the country.

According to P&S Intelligence, Thailand will be quite significant for the ASEAN electric vehicle market in the foreseeable future due to the surging environmental concerns and rising implementation of government policies supporting the production and sale of EVs. For instance, in 2017, the Thai government issued its EV policy to increase the number of EVs to 1.2 million by 2036. This policy offers corporate tax exemptions for 5–8 years on BEV investment projects. Similarly, BEV and PHEV bus investment projects are eligible for corporate tax exemption for 3 years and import tariff exemptions on production machinery.

Therefore, the escalating concerns regarding the soaring air pollution levels and respiratory diseases associated with them and rising government support for EV production and adoption will augment the sale of EVs in ASEAN in the coming years.