China is the center of the global EV market. More than half of all EVs sold last year were produced by Chinese companies, according to a recent report from the International Energy Agency. Sixty percent of all EV sales in 2023 were in China.
Yet China’s EV success could be running out of room to grow. Automakers in China are already engaging in price wars to boost sales—and a protectionist backlash in Europe and the U.S. (as well as consumer preference for hybrids) could close off those markets to Chinese cars.
That may put the fate of China’s EV brands partly in the hands of economies in Southeast Asia and Latin America, according to the IEA’s recent report. While sales in developing economies still lag China, Europe, and the U.S., growth is accelerating in economies like Thailand and Vietnam.
Thailand in particular could be an opportunity for Chinese carmakers. The Thai government has introduced a series of incentives such as subsidies and lower import taxes in a bid to boost EV adoption, and that has already attracted Chinese EV manufacturers like BYD and Great Wall Motor to set up facilities in the country.
Chinese-owned EV brands, which tend to sell cheaper models than their non-Chinese counterparts, doubled their market share in Thailand last year. Collectively, they have 11% of the Thai market, according to figures released by Toyota’s Thai subsidiary in February.
In a Bloomberg interview earlier this year, the president of the Electric Vehicle Association of Thailand forecast that EVs will account for 20% of all vehicle registration in Thailand this year.
Indonesia is also trying to boost EV adoption, though its EV market is still small. Only 2% of its auto sales last year were EVs, according to the IEA. Outgoing president Joko Widodo previously set a target for EVs to make up 20% of all Indonesian car sales by 2025. Chinese brands like BYD and Chery, as well as Vietnam’s VinFast, currently sell in the country.
Despite concerns from automakers about slowing EV sales, the IEA is upbeat on the EV market’s prospects for 2024. The international agency predicts that EV sales could hit 17 million units this year, or over one in five of all cars sold.