Electric vehicles (EVs) are gaining momentum globally, but in Southeast Asia, adoption remains in its early stages—fragmented, uneven, and facing a distinct set of hurdles. Yet the region also presents a compelling opportunity: rising urbanization, growing interest from governments and investors, and early signs of market readiness are laying the groundwork for change. This article explores Southeast Asia’s EV landscape through a supply chain lens, examines key barriers to mass adoption, and identifies practical pathways to accelerate progress—drawing on global lessons while applying a local lens to make solutions work in this unique context.

Why EV Adoption Matters

The shift to EVs is about more than just modernizing transportation. It is a critical step toward climate and public health goals.

Climate Imperative

Transportation accounts for 20–25% of global CO₂ emissions. Decarbonizing road transport is essential for countries aiming to meet their national climate targets and commitments under the Paris Agreement. EVs, alongside cleaner energy generation, form a key part of this transition.

Public Health

Internal combustion engines emit harmful pollutants like nitrogen oxides (NOx), sulfur dioxide (SO₂), and fine particulate matter (PM2.5), which contribute to respiratory diseases and premature deaths. EVs significantly reduce both air and noise pollution, improving quality of life, especially in congested cities.

Southeast Asia’s EV Landscape

Low Adoption, High Potential

Even with strong growth in recent years, EV adoption in Southeast Asia remains modest, with electric vehicles making up just around 10% of new passenger vehicle sales in 2024. This contrasts sharply with more advanced markets, with EVs making up 43% of sales in China, 22.7% in Europe, and 88.9% in Norway. So far, growth has been limited due to high Total Cost of Ownership (TCO), infrastructure gaps, and limited consumer trust.

Regional Leaders Emerging

Amid the region’s slow overall adoption, there are signs of progress and leadership. Thailand is becoming a production hub, attracting global players like BYD and Great Wall Motor. Vietnam’s VinFast is expanding globally as a homegrown EV brand. Indonesia is building a battery supply chain, tapping into its nickel reserves. These moves show early momentum and growing regional ambition in the EV space.

Venture Capital as a Growth Engine

Alongside government efforts and industrial investments, venture capital and corporate venture capital (CVC) are backing startups in areas such as battery technology, EV fleet platforms, charging infrastructure, and financing solutions, helping to fill gaps that are not yet addressed by large corporations or governments. According to CB Insights’ State of Climate Tech 2024 Report, equity funding for electric vehicle technology peaked at $23.7 billion in 2021 and remained strong in 2022. While funding dropped to $4.8 billion across 243 deals in 2024, driven by macroeconomic headwinds, high interest rates, and investor caution, this trend is widely seen as cyclical rather than structural. The long-term outlook of the industry remains positive as EV adoption continues to rise steadily, supported by falling battery costs, improving charging infrastructure, and stronger regulatory mandates for zero-emission vehicles. As the EV sector matures and demand for scalable, localized solutions grows, venture funding is expected to rebound, especially in underpenetrated regions like Southeast Asia.

Key Challenges to Mass EV Adoption in Southeast Asia

Despite recent progress, Southeast Asia’s EV ecosystem remains underdeveloped across nearly every segment of the supply chain. These weaknesses pose both practical and psychological barriers to widespread adoption.

To understand the roadblocks to mass EV adoption, it’s important to examine the EV value chain from raw materials to recycling. This supply chain lens offers a structured view of the ecosystem’s maturity and highlights where bottlenecks exist.

In this analysis, we assess the maturity level of each supply chain stage in Southeast Asia by comparing:

• • The current state of EV-related capabilities in SEA to that of more advanced economies (such as China, the EU, and the U.S.), where the EV ecosystem is already scaled and integrated.
  • The ideal maturity needed to support mass adoption, drawing parallels to the level of infrastructure and ecosystem development that currently supports internal combustion engine (ICE) vehicles in Southeast Asia (e.g., widespread service networks, financing availability, and resale markets).

In essence, a stage is considered “low” or “very low” in maturity if it significantly trails either benchmark, highlighting its inability to meet the demands of a mainstream EV transition today.

A Supply Chain Perspective

In this analysis, we focus on the mid to later-stage of the supply chain, where Southeast Asia still exhibits a very low to low level of maturity. These are the most pressing challenges because they directly impact the availability, affordability, and trust in EVs. Other segments further down the chain, like vehicle assembly or branding, have existing workarounds or substitutes that can suffice temporarily. However, until the foundation is in place, scale and sustainability will remain out of reach.

1. 1. Infrastructure Gaps

• • Charging Infrastructure: One of the most visible barriers to EV adoption is the lack of widespread, reliable charging infrastructure. Public chargers per EV remain low across the region, and few fast-charging corridors exist to support intercity travel. Land acquisition for charging points, especially in urban areas, is both expensive and logistically complex.
  • Grid Readiness: Electricity grids in most countries are not yet ready for the additional load that mass EV charging would bring. Distribution networks require major upgrades, and smart tariffs that encourage off-peak charging are still missing or underutilized.

1. 2. Distribution and Financing Barriers

• • Consumer Awareness: Consumer misconceptions continue to slow EV adoption. Many consumers still worry about range limitations, safety concerns, and long charging times. These concerns are compounded by a lack of familiarity with new EV brands like BYD or VinFast, which don’t yet enjoy the same recognition as legacy automakers.
  • Financing Constraints: Financing is another critical hurdle. Auto loans, especially for EVs, are less accessible in many emerging Southeast Asian markets [because?]. Even where subsidies or tax incentives exist, they are often inconsistent or insufficient to meaningfully close the affordability gap. Low expected resale values further deter buyers and financiers alike.

1. 3. After-Sales Ecosystem

Beyond the purchase, EV owners face a thin after-sales service network. Certified EV repair centers and trained technicians remain rare, especially outside major cities. Battery maintenance, replacement cost, and long wait times for service all contribute to buyer hesitation and reduce confidence in long-term ownership.

1. 4. Recycling and Second-Life Use

Battery disposal is the next looming challenge. Most Southeast Asian countries still lack clear policy frameworks and infrastructure for EV battery recycling. As a result, batteries are often exported or discarded improperly, raising environmental risks and limiting the value that could be extracted from second-life applications such as energy storage.

The Bottom Line

The lack of maturity in critical supply chain stages does not just delay EV adoption. It creates a chain reaction of systemic obstacles that undermine the entire ecosystem.

• • Limited charging infrastructure leads to range anxiety, which discourages buyers and weakens demand. Without consumer confidence, EV deployment remains slow, further reducing the incentive for private and public investment in charging networks.
  • Low resale values discourage financing institutions, which in turn makes it harder for consumers to afford EVs. Without financing, upfront costs remain a major barrier for low- to middle-income consumers, the segment most likely to drive mass adoption.
  • An underdeveloped after-sales ecosystem erodes trust. Consumers fear the long-term costs and inconveniences of maintenance, especially for something as complex and battery-dependent as an EV. This mistrust reduces word-of-mouth promotion and hampers brand loyalty.

Together, these issues form a self-reinforcing cycle. Without strategic interventions to address them, particularly at the foundational supply chain stages, Southeast Asia risks falling behind in the global EV transition.

Solutions to Accelerate EV Adoption: Policy and Private Sector in Tandem

Mass adoption of electric vehicles (EVs) in Southeast Asia requires coordinated effort between governments and the private sector. While public policy can lay the groundwork by reducing systemic barriers, de-risking investments, and setting standards, private sector players are often the ones driving innovation, scaling solutions, and meeting consumer needs on the ground.

In this section, we present a two-fold approach, policy solutions and private sector initiatives, drawing on global best practices to tackle the key challenges identified earlier. We highlight real-world examples from companies that are already implementing these solutions, offering inspiration for practical models. At the same time, we consider Southeast Asia’s unique barriers and explore how these strategies can be adapted to address them effectively.

Figure1: The policy and private sector solutions to challenges in each supply chain stage

Driving EV adoption in Southeast Asia requires close coordination between governments and the private sector, each with distinct but complementary roles. Governments set the national direction through regulation, incentives, and infrastructure planning, while also helping to reduce investment risks. The private sector brings innovation—developing vehicles, charging solutions, and business models—and works with policymakers to ensure infrastructure is efficiently deployed and user-friendly. When aligned, this partnership creates the foundation for a scalable, integrated EV ecosystem.

One standout example is the partnership between Gogoro and the Taiwanese government. Recognizing the challenges of developing charging infrastructure, the government provided subsidies for both electric scooter purchases and battery-swapping stations, while integrating Gogoro’s network expansion into urban planning strategies. In response, Gogoro built a dense network of battery-swapping stations and pioneered a subscription-based battery model, making EV ownership more convenient and affordable. This public-private coordination allowed Taiwan to rapidly scale EV adoption, especially in cities, demonstrating how aligned incentives and integrated planning between sectors can overcome infrastructure bottlenecks and foster sustainable mobility.

Another interesting area where collaboration between governments and the private sector is driving EV adoption is in smart grid solutions. One notable example is the FLOW project in Europe, a consortium of 30 organizations, including Enel X Way, supported by the European Union under the Horizon Europe program. This initiative aims to enhance electric mobility by integrating smart charging and vehicle-to-grid (V2G) technologies, thereby improving grid flexibility and stability.

These two examples are just the beginning. As outlined throughout the EV supply chain, there are vast opportunities for collaboration between the public and private sectors, from infrastructure to after-sales services and recycling. For Southeast Asia, adopting and adapting these models can help foster meaningful partnerships, align national strategies with market innovations, and ultimately accelerate EV adoption across the region in a way that fits its unique needs and development stage.

Adapting Global Models to Southeast Asia

While solutions exist, Southeast Asia faces some unique challenges:

• • Economic Disparity is a core consideration. Many consumers in Southeast Asia prioritize affordability, making two- and three-wheeled vehicles a more viable entry point than high-cost passenger EVs. Battery swapping models are especially promising for urban commuters and delivery services. Additionally, concessional funding from institutions such as the Green Climate Fund or Asian Development Bank can help close the financing gap, while countries can simultaneously invest in promoting local EV manufacturing to drive down costs and build industrial capacity
  • Policy Fragmentation remains a barrier. Different agencies within a single country often operate separately, and cross-border cooperation is limited. Establishing national EV councils could help align energy, transport, and industry strategies under a unified roadmap. On a regional level, platforms like ASEAN could be leveraged to harmonize standards, encourage regional value chains, and foster joint infrastructure initiatives. Public-private partnerships (PPPs), when structured effectively, can accelerate infrastructure rollouts by combining state support with private-sector innovation.
  • Diverse national and local contexts further complicate standardization. Countries differ widely in geography, urbanization, and transport habits. Instead of one-size-fits-all solutions, policymakers and companies should prioritize hyperlocal innovation such as tuk-tuk electrification projects or mobile charging units for rural areas. Digital platforms can play a role in expanding access to EV services, especially where physical infrastructure is limited. Finally, city-level collaborations with startups and utilities can provide sandbox environments for testing scalable models, ensuring bottom-up innovation complements top-down planning.

By adapting global models to fit local realities, Southeast Asia can chart its own path to a sustainable, inclusive EV future.

The Role of Financial Institutions in Scaling EVs

Financial institutions play a critical role in accelerating EV adoption by bridging funding gaps and reducing investment risks across the ecosystem. One of the major hurdles in EV financing is the perceived low resale value of EVs, which weakens the value proposition for lenders and deters traditional financing.

Development banks such as the Asian Development Bank (ADB), Green Climate Fund (GCF), and International Finance Corporation (IFC) stepping in to address this by offering concessional loans, guarantees, and anchoring blended finance programs that help shift the risk profile for commercial financiers. These instruments enhance the risk-adjusted return for private lenders, unlocking capital that would otherwise remain sidelined. The table below outlines some key examples of lending programs offered by these institutions that directly support EV ecosystem development:

Venture capital and CVC firms play a pivotal role by backing early-stage companies developing EV-enabling technologies that traditional lenders may consider too risky. In Southeast Asia, startups like Muvmi (Thailand-based electric tuk-tuk ride-hailing platform) and Sleek EV (Thailand-based electric motorcycle subscription and fleet service) have attracted venture funding to scale innovative business models tailored to urban mobility needs and local consumer behavior. These early investments not only support product development and deployment but also lay the groundwork for broader commercial or public financing. By funding local innovation, VCs help accelerate the development of scalable, context-specific solutions that can drive long-term EV adoption across the region.

Commercial banks are also stepping in, partnering with automakers to provide green auto loans, fleet financing, and flexible EV leasing schemes that lower upfront costs for consumers and businesses alike. On the innovation front, venture capital firms and corporate venture capital arms are fueling the growth of enabling technologies by backing startups in areas such as charging infrastructure, battery innovation, and fleet management software.

Insurance providers are adapting to the evolving mobility landscape by developing EV-specific products that offered added reassurance for both drivers and fleet operators. One example is usage-based insurance (UBI), where premiums are determined by actual vehicle usage and driving behavior. In Singapore, NTUC Income has partnered with Carro to offer UBI policies for EVs, using telematics to track mileage and encourage safer driving, providing more affordable and flexible coverage.

Battery performance is also a major concern for many EV buyers. To address this, automakers like Hyundai and Kia offer long-term battery warranties, up to 10 years or 100,000 miles, guaranteeing performance and protecting against capacity drops below a certain threshold. These innovations help mitigate perceived risks and make EV ownership more financially predictable.

Conclusion: The Road Ahead

Southeast Asia’s journey toward electric mobility will not follow the same script as Europe or China. The region’s transition must reflect its own economic diversity, infrastructure gaps, and social fabric. Rather than copying models wholesale, Southeast Asia must chart a tailored path that meets the needs of its people and cities.

To move the needle on EV adoption in Southeast Asia, all key stakeholders must act in concert, each playing a distinct yet interdependent role across the EV value chain. This collaborative effort is essential to effectively address the three underlying systemic obstacles: the limited charging infrastructure, the challenge of low resale values, and the underdeveloped after-sales ecosystem.

• • Governments are the foundational enablers, driving EV adoption by providing targeted incentives and establishing clear, consistent regulations. They can alleviate range anxiety by subsidizing charging infrastructure and modernizing the grid, while promoting consumer confidence through stable purchase incentives and support for battery health certification programs. By funding vocational training and setting service standards, governments also lay the groundwork for a trusted after-sales ecosystem.
  • Startups and private sector players are central to innovation and execution, bringing market agility to solve region-specific challenges. They can rapidly deploy localized charging networks and introduce innovative solutions like battery swapping to ease infrastructure concerns. To address low resale values, these companies can offer flexible financing models such as battery leasing or guaranteed buy-back programs. Furthermore, they are vital in developing accessible and specialized after-sales services and digital platforms that build consumer trust and loyalty.
  • Financial institutions, including development banks, commercial lenders, and insurers, play a pivotal role in bridging funding gaps and managing risk, making the ecosystem financially viable. They facilitate the capital-intensive deployment of charging infrastructure through targeted loans and risk guarantees. To mitigate concerns over low resale values, they can offer tailored EV loan products with favorable terms and develop insurance solutions that cover battery value.

With deliberate coordination across sectors, Southeast Asia has the potential not just to catch up, but to define its own electric future, one that is inclusive, sustainable, and uniquely suited to the region.

Author: Benjamas (Air) Tusakul

Editors: Krongkamol (Joy) deLeon, Woraphot (Ping) Kingkawkantong

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