The global shift towards electric mobility (eMobility) will continue in 2025 as more people become conscious about reducing carbon emissions to protect the environment. According to Statista, many customers are opting for greener transportation because of rising fuel costs, a desire to use energy efficiently, and to seek alternatives to gas-powered cars. Market revenue this year is projected to reach USD 828.6 billion.
Electric mobility in Southeast Asia is on trend and expected to become commonplace, according to SCBX, with the electric vehicle (EV) sector reaching USD 60 billion by 2030. Thailand leads the region with a 59% market share, while Indonesia is second at 25%. SCBX also notes that Indonesia has vital resources for battery production—nickel and cobalt—making it a critical player in the global EV supply chain.
We examine how the rise of electric vehicles (EVs) is transforming Singapore’s car industry
Vietnam is succeeding in the two-wheeler market, turning 90% of the bikes into EVs. Meanwhile, Singapore is positioning itself as a future EV hub by upgrading its regulatory frameworks and laws, enabling faster entry into the electric mobility market.
Factors driving Southeast Asia’s potential for becoming an eMobility hub
According to the Center for Strategic and International Studies (CSIS), the Association of Southeast Asian Nations (ASEAN) hopes to become the next EV hub, with 20% of the vehicles in 2025 being electric. Several factors are contributing to the region being able to achieve this objective, including:
- The presence of a large market: Southeast Asia is home to over 680 million residents, giving the area a large market to sell electric vehicles and battery technologies. As the middle class grows and the digital economy expands, people will have access to more funds to upgrade from their gas-powered cars to more eco-friendly options and turn their energy-hungry cities into smart, energy-efficient areas.
- Battery manufacturing capacity: ASEAN is an attractive alternative to China, which produces nearly 75% of the lithium-ion batteries. The region has countries like Indonesia, which has the largest nickel, tin, and copper deposits. Other nations, such as the Philippines and Vietnam, have nickel reserves, contributing to the area’s battery manufacturing capacity. Having local natural resources reduces the costs of EVs and other mobility technologies that power the transportation ecosystem.
- Local and foreign investment: Regional countries have implemented measures to attract investors. For example, the Thai government has cut excise taxes on imported EVs and reduced import duty on fully-built EVs. Singapore has announced rebates to lower the costs of purchasing an electric vehicle and increase adoption. Moreover, they have set aside funds to build more charging points throughout the city-state.
Another example is Thailand’s national incentive program for local EV production, which is boosting sales and helping the country become the biggest EV market in ASEAN. Last year, South Korean automaker Hyundai Motor Company announced it would invest USD 28 million in the country to set up an assembly plant for EVs and batteries.
- 4. Energy security in Southeast Asia: Finally, the war between Russia and Ukraine has hurt energy prices, putting pressure on Southeast Asian countries and affecting multiple industries. Shifting to renewable energy and adopting green transportation systems lowers the demand for fossil fuels, enables the nations to direct energy where it is needed, and positively impacts the environment.
Potential for ASEAN’s eMobility market
The eMobility market faces various challenges that impact adoption and delay the much-needed eco-protection solutions they provide. The main issue is cost. Switching from non-renewable energy sources to renewables is expensive, and governments must intervene to subsidise the ecosystem. Furthermore, technology and battery raw material expenses push EV prices higher, reducing the number of customers willing to buy one.
Secondly, the lack of charging infrastructure makes drivers anxious about owning an EV. They are wary about driving long distances and must always check their maps to ensure charging stations are available for their trip. Additionally, these stations are vulnerable to security threats and hackers.
Third, the Southeast Asia Electric Vehicle Outlook (EVO) Report 2024 said the region would need around 11.5 million chargers and a cumulative investment of USD 3.1 billion by 2040. Energy requirements would also soar to 85 terawatt-hours, up from 322 gigawatt-hours in 2023. This power demand puts pressure on natural resources and increases environmental degradation.
Lastly, consumers lack awareness about the value of electric mobility. Despite these concerns, there are opportunities for startups and established companies to collaborate with governments to develop eMobility solutions. Stakeholders can ensure regulations and tax incentives are in place to make the ecosystem run smoothly and attract investors.
Even though electric mobility in Southeast Asia will benefit the environment immensely, providing clean air and reducing pollution, it also presents an economic opportunity for the region. ASEAN can become a global exporter of EV components and technology, bringing prosperity to the area.