The subsidies in the region need to be increased to significantly reduce the high upfront costs of buying EVs compared to internal combustion engine (ICE) vehicles. The only exception is Singapore, where the analysts say EV and ICE car prices are similar. Additionally, Singapore, Thailand, and Vietnam are the only Asean countries with plans to phase out ICE vehicles by 2030, 2035 and 2040, respectively.
Despite trailing behind developed economies and China in electric vehicle (EV) adoption, Maybank Securities’ Asean Mobility Report suggests that the Asean region is well-positioned for EV growth due to increased investment in charging infrastructure, policy and incentive support, and the development of local manufacturing systems.
Analysts Jigar Shah and Neerav Dalal note that Asean’s EV penetration is notably low compared to other emerging markets. By the end of 2022, EV car sales in Asean accounted for just 2.1% of total vehicle sales, compared to 29% in China, 21% in Europe, and a global average of 14%. The primary factors contributing to this low penetration are high upfront costs and a lack of a robust local production ecosystem.
