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Want an inexpensive EV car? Go to Asia where they can be cheaper than gas autos.

Developing Nations Aren’t Ready for EVs—Unless They Are Made in China

Auto manufacturers such as Great Wall Motor are making inroads in Southeast Asia, and a fight for Europe market share looms


By River Davis, WSJ

Jan. 8, 2023 5:30 am ET


KORAT, Thailand—When Wimonsiri Boonyopakorn‘s husband moved to Bangkok for work earlier this year, the 35-year-old schoolteacher decided to buy a car so she could make the 160-mile trip to visit him on weekends.


She was surprised to find several electric vehicles from Chinese manufacturers that cost less than gas-powered cars of a similar size.


“I had an image of an EV being very fancy,” she said.


For now, the Thai EV market is just a rounding error in the global car industry. But it points to some trends that analysts say are worrisome for global auto makers.


With government subsidies, Chinese EVs are emerging as price leaders in Southeast Asian nations where Japanese companies like Toyota Motor Corp. and Isuzu Motors Ltd. have long controlled most of the automotive market. That is a contrast with developed nations like the U.S., where EVs are generally sold to those who can afford to pay extra for the environmental halo.


Chinese EV makers are bringing to the developing world the benefits of manufacturing scale that they built back home with state support. For more than a decade, China has backed the production of smaller, affordable EVs and their most expensive component, batteries. In 2022, China accounted for more than half of EVs sold globally.


In Korat, a Thai regional center northeast of Bangkok, the fresh black paint and large windows of a newly built Great Wall Motor Co. GWLLY 1.01%increase; green up pointing triangle dealership stand out on a strip of highway lined with older-looking showrooms offering Nissans and Fords.


With a less-affluent population, “Thailand and other emerging nations in Asia have different requirements for EVs than the U.S.,” said Hirotaka Uchida, head of the Southeast Asia automotive business at management consulting firm Arthur D. Little. Chinese manufacturers are showing that they are able to play to the need for affordability, he said.


Political considerations make it unlikely that Chinese auto makers could develop a big presence in the U.S., but some analysts say their dominance of EV sales in Southeast Asia could be a precursor to a fight for market share in Europe, the second-largest EV market after China.


In a November report, Fitch Solutions said a weakening economy could lead some consumers in the developed world to look for options from China. The market-research firm said Chinese brands could double down on efforts to expand in Europe in 2023 and claim up to 15% of the continent’s battery-electric market in 2025, from about 5% in 2022. Some Chinese brands are also looking to sell higher-end models in Europe.



In Thailand, 13,298 EVs were sold in the first nine months of 2022, according to the country’s energy ministry, up from 1,954 in 2021. The Bangkok-based Kasikorn Research Center estimates that Chinese manufacturers accounted for about 80% of those EV sales.


Price makes the difference. Toyota’s electric bZ4X retails for about $53,000 in Thailand. Tesla Inc. recently started selling cars in the country, and its Model 3 starts at around $51,000—more than twice what Ms. Boonyopakorn paid for her new car.


The vehicle Ms. Boonyopakorn settled on was an electric subcompact called the Ora Good Cat from China’s Great Wall Motor. It cost her 763,000 baht, equivalent to about $22,000, with the help of around $4,000 in government subsidies. That made it less expensive than a gas-powered Toyota Corolla or Honda Civic.


In Indonesia, SAIC-GM-Wuling Automobile Co.’s Air electric hatchback was introduced last summer and became the country’s top-selling EV in the July-to-September quarter. It starts at a price equivalent to around $15,000.


For now, the Chinese share of the overall Thai market is small. Japanese brands offering mostly gasoline-powered and hybrid gas-electric cars account for about 80% to 90% of total vehicle sales, according to Arthur D. Little.


In Thailand, Toyota believes that EVs as well as other vehicles like hybrid and hydrogen-powered cars can play a role in reducing carbon emissions, said Prasanna Ganesh, an executive at Thailand-based Toyota Daihatsu Engineering & Manufacturing. For now, compared with EVs, hybrids need less support from subsidies and “can be a mass and accessible solution,” Mr. Ganesh said.


A Toyota spokeswoman said the company planned to introduce numerous EV models in Asia.


Especially in areas outside of major cities like Bangkok and Korat, few non-Japanese vehicles are visible on roads. Many are sport-utility vehicles or trucks, which are costly to power with batteries.


Siriwan Boonvisuit, who manages a Toyota dealership in the central province of Saraburi, said, charging infrastructure remains limited and around 60% of vehicles are pickup trucks. Farming is a major industry in the province, and people often use the beds of their trucks to transport goods like durian and sugar cane, she said.


“Interest in EVs is a trend in bigger cities,” Ms. Boonvisuit said. In Saraburi, “Chinese auto makers aren’t causing a sense of crisis,” she said.


The competition is still in its early stages. Great Wall opened a car factory in Rayong, Thailand, in June 2021, initially making hybrid vehicles. In September, the company said it wanted the Rayong plant to become a “global production and export base.”


PHOTOS: The EV Rivals Aiming for Tesla’s Crown in China


PHOTO: THOMAS PETER/REUTERS

BYD Co., a top Chinese EV maker that has backing from Warren Buffett’s Berkshire Hathaway Inc., said in September it planned to open its first wholly owned passenger car factory outside China, also in Rayong. It said the plant would open in 2024 with an annual production capacity of 150,000 EVs to be sold mostly in Southeast Asia and Europe.


The Mercator Institute for China Studies, a German think tank, has advocated that Europe use trade measures to prevent its market from being flooded by low-cost Chinese EVs.


China’s “market-distorting industrial policies” give it an edge, the think tank said. Cars have long been a big European export to China and elsewhere, but “China-made EVs could turn Sino-EU automotive trade on its head,” it said.


Write to River Davis at river.davis@wsj.com



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