The region is in an FDI arms race to capture the global electric vehicle market, by Natasha Teja, FDI Intelligence
#Indonesia, #Thailand, #Malaysia and #Vietnam have released a slew of incentives in recent years in a bid to be the next hub for electric vehicles (EVs), servicing a growing global demand from a fledgling regional market. Generous tax breaks see countries in south-east Asia trying to outbid each other to capture the growing interest of overseas investors.
“We are currently in an investment race where [Association of Southeast Asian Nations (ASEAN)] countries are competing to get foreign investors to come in,” says Alloysius Joko Purwanto, energy economist at the Economic Research Institute for ASEAN and East Asia. “That is the current situation, not only in EV manufacturing but also in its batteries.”
The market in southeast Asia is in its early stages, with EVs accounting for just under 2% of the region’s total passenger vehicle sales in 2022, according to Counterpoint. More than half of the region’s EV demand stems from Thailand at 58.3%, followed by Indonesia at 19.5%, Vietnam at 15.8% and Singapore at 3.8%.