Wed. Oct 4th, 2023
    BYD Surpasses Tesla as Southeast Asia’s Leading EV Brand

    China’s electric vehicle (EV) giant BYD has achieved remarkable success in Southeast Asia, capturing more than a quarter of the region’s EV market share and surpassing rivals like Tesla. The key to BYD’s early success lies in its distribution partnerships with large local conglomerates, enabling the automaker to expand its reach, understand consumer preferences, and navigate complex government regulations.

    This partnership model is reminiscent of the approach taken by Japanese automakers in the region decades ago and has allowed BYD to rapidly gain market share. Unlike Tesla, which follows a go-it-alone distribution strategy, BYD focuses on brand proliferation rather than optimizing profit margins. BYD offers attractive profit margins to its local dealers, fostering trust and loyalty, which in turn paves the way for broader expansion.

    BYD’s success is evident in the numbers. According to Counterpoint Research, BYD sold over 26% of all EVs in Southeast Asia in the second quarter of 2023. Its Atto 3 model, priced from $30,000 in Thailand, emerged as the regional bestseller. In contrast, Tesla prices its most basic Model 3 from about $57,500 in Thailand. EVs accounted for 6.4% of all passenger vehicle sales in Southeast Asia in the second quarter, up from 3.8% in the previous quarter, indicating the growing importance of the EV market in the region.

    BYD’s regional distribution partners include Sime Darby in Malaysia and Singapore, Bakrie & Brothers in Indonesia, Ayala Corp in the Philippines, and Rever Automotive in Thailand. These partnerships help establish BYD in a region where Chinese car brands lack an established track record. Working with trusted and established players like Sime Darby, Bakrie & Brothers, and Ayala Corp provides buyers with peace of mind, especially in terms of aftersales support.

    BYD is making significant investments in Southeast Asia. The company is planning to build a new factory in Thailand, investing nearly $500 million, to produce 150,000 EVs annually for export to Southeast Asia and European markets. In the Philippines, BYD’s partner Ayala Corp aims to open twelve BYD dealerships in the next year, focusing on brand building and dispelling myths about EVs, such as range anxiety and price concerns.

    While BYD gains traction in Southeast Asia, Tesla’s presence in the region is relatively minimal. Tesla’s website lists only two stores in Singapore, although it is seeking to expand its presence in Thailand and Malaysia. Tesla’s direct-to-consumer approach is difficult for other EV brands to replicate, given its distinct buzz and the media presence of CEO Elon Musk.

    BYD is taking a unique approach in Singapore to attract young, tech-savvy consumers. The company and its partner Sime Darby Motors have launched five “BYD by 1826” showrooms that also serve as upscale restaurants, with dishes named after BYD EV models. This innovative strategy allows BYD to engage with customers who are interested in learning more about the brand.

    Sources: Reuters