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Against the backdrop of slowing demand for electric vehicles in Europe and the United States and the excessive "involution" of the Chinese auto market, the Southeast Asian market "looks beautiful", which has attracted more and more competitors. Rohan Patel, senior director of public policy and business development at Tesla, once said that Southeast Asia will undoubtedly become the main growth point for battery energy storage and electric vehicle applications in the next few years. However, according to recent reports from several local media, Tesla has made a decision to stop plans to build a manufacturing plant in Thailand and instead focus on expanding its charging network in the country. Sources said that in addition to China, the United States and Germany, Tesla will not continue the factory opening process in Malaysia, Indonesia, Thailand and other countries at present.

Malaysian Prime Minister Anwar Ibrahim said on Friday that Tesla's delay in expanding in Southeast Asia had nothing to do with local performance or policies, but rather was because the company was unable to compete with Chinese electric vehicles, resulting in losses.

In a conference call last month, Tesla told investors that its profits had been cut in half due to fierce competition from its peers. According to the financial report released last month, Tesla's net profit in the second quarter of this year was $1.5 billion, a 45% decrease, and its operating profit margin was 6.3%, which was not only lower than 9.6% in the same period last year, but also lower than many established automakers.

According to statistics, Tesla's global sales growth rate continued to slow down from 2021 to 2023, with year-on-year growth rates of 87%, 40% and 38% respectively. In the first quarter of this year, deliveries fell by 8.3% year-on-year, marking the first year-on-year decline in quarterly sales in nearly four years. Auto analyst Zhong Shi believes that the current competitive environment in the new energy vehicle market is very different from when Tesla was first produced in China. In the early days, Tesla seized the market opportunity and rapidly increased sales, but at present, domestic brands continue to accelerate product research and development, rapidly iterate models, and prices continue to fall, which to a certain extent diverts Tesla's model sales.

Tesla currently has four vehicle factories, located in Shanghai, China, Berlin, Germany, Austin, Texas, and Fremont, California. In recent years, Tesla has been rumored to plan to build factories in emerging market countries, including Indonesia, Thailand, and India.

Tesla has only publicly committed to building a factory in Mexico, but the plan faces considerable uncertainty. Musk previously said Tesla would postpone its decision on whether to build a factory in Mexico until after the U.S. presidential election in November.

Musk explained that Republican presidential candidate Trump has threatened to impose high tariffs on cars produced in Mexico. If this idea comes true, it would make no sense for Tesla to invest heavily in Mexico.

From the perspective of the Southeast Asian market, Japanese and Chinese automakers have the strongest presence. Japanese automakers entered Southeast Asia very early and have a high market share there; in recent years, Chinese automakers have accelerated their overseas expansion and are gradually gaining a foothold in Southeast Asia through new energy vehicles, occupying a dominant position in the local electric vehicle market. Taking Thailand as an example, a dual pattern has been formed, with "80% of the market being Japanese cars and 80% of electric vehicles being Chinese brands."

The Kasikorn Research Center in Thailand predicts that as the Thai government continues to promote the policy of popularizing electric vehicles, more Chinese electric vehicle brands will enter the Thai market in 2024. Grizada Udamo, president of the Thai Electric Vehicle Enterprise Association, said that Chinese auto brands' investment in Thailand will continue to grow in 2024, and Chinese brands such as MG, Great Wall, BYD, Changan, and Nezha will be increasingly accepted in the Thai market. He also pointed out that there are more and more electric models on the market priced within 1 million baht (about 200,000 yuan), and with the increasingly sound after-sales service system, Thai consumers' purchasing confidence has gradually increased. Take the 2024 BYD Atto3 as an example. Its starting price is about 900,000 baht, which is much lower than the price of Japanese competitors such as Toyota bZ4X and Nissan Leaf. At this auto show, BYD painted the words "WE ARE NO.1" on the exhibition car, which shows that Chinese automakers have no longer concealed their ambition to replace competitors such as Toyota.

The Thai government has been actively recruiting multinational automakers, hoping that they will invest in the production of electric vehicles in the country. Thai Prime Minister Setia has previously invited local automakers during his visits to the United States and Japan. At the end of last year, Setia negotiated with executives of several Japanese automakers during his visit to Japan, and used Chinese automakers to stimulate Japanese automakers, saying that "if they don't make electric cars, they will be left behind", and promised to provide support to Japanese automakers. This is why Japanese automakers invested 150 billion baht to focus on investment in Thailand's electrification field.

Earlier, Congsomjit, an official from the Thai Prime Minister's Office, said that Tesla is negotiating with the Thai government to build a factory in Thailand. At the end of last year, Tesla executives went to Thailand to conduct an on-site survey of potential factory sites. It is reported that the Thai government has promised to provide Tesla with 100% green energy to operate this potential factory.

The battle between major automakers in the Southeast Asian market has already begun, and the competition will only become more intense in the future. According to the forecast of the international accounting firm Ernst & Young, by 2035, the sales of electric vehicles in the six Southeast Asian countries (Thailand, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam) will reach 8.5 million, and sales will increase from US$2 billion in 2021 to US$80 billion to US$100 billion. Part of these sales will come from new growth, and a larger part will come from the replacement of fuel vehicles.

Beijing Business Daily Comprehensive Report