Tesla eyes Southeast EV market to get back pole position from BYD

Tesla is prioritising its expansion into Southeast Asia, viewing it as a key growth market. The region's fast-growing EV market presents the company w
Tesla is prioritising its expansion into Southeast Asia, viewing it as a key growth market. (AP)
Tesla is prioritising its expansion into Southeast Asia, viewing it as a key growth market.

In a significant shift, Chinese electric vehicle (EV) manufacturer BYD has recently surged ahead of Tesla to claim the top spot in the EV space. This rise to prominence is largely attributed to BYD's strategic focus on the region, where it has built a strong reputation and customer base, unlike in many Western markets where it is still establishing itself. Furthermore, being a homegrown carmaker in China, the world's largest auto market, has given BYD a substantial advantage in resources and market understanding.

In response to losing its lead, a senior executive from Tesla has highlighted Southeast Asia as a key priority for the company's expansion. The region, which has emerged as one of the fastest-growing EV markets globally, presents a significant opportunity for Tesla to tap into a large customer base, especially as demand in the United States slows down.

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"Southeast Asia will undoubtedly be a major place of growth over the coming years in battery storage and electric vehicle adoption," noted Rohan Patel, Tesla's senior public policy and business development executive, underscoring the region's importance."

Tesla's recent delivery of Model Y cars in Malaysia marks a significant step in its Southeast Asia strategy. The company is also selling its Model 3 compact sedan in the country, following the Malaysian government's approval last year for Tesla to sell its cars and establish a network of charging stations.

Also Read : India open to all EV makers, no special treatment for Tesla: Minister Goyal

In addition to Malaysia, Tesla is eyeing expansion in other Southeast Asian countries, including Thailand, which is the region's largest car producer and exporter. Discussions have been held regarding the potential establishment of a production facility in Thailand, indicating Tesla's serious intentions for the region.

However, Tesla's ambitions in Southeast Asia face stiff competition from BYD, which has quickly become a dominant player in the region's EV market, accounting for over a quarter of all EVs sold. In contrast to Tesla's direct-to-consumer strategy, BYD has chosen to collaborate with prominent local conglomerates. This approach has allowed BYD to broaden its market reach, gain insights into consumer preferences, and adeptly navigate intricate government regulations.

In the second quarter of 2023, BYD sold more than 26 per cent of all cars in Southeast Asia's EV market, while Tesla's share stood at about 8 per cent, according to Counterpoint. Despite this, EVs accounted for only 6.4 per cent of all passenger vehicle sales in the region during the quarter, indicating significant growth potential for both companies in the coming years.

First Published Date: 14 Mar 2024, 09:46 AM IST

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