According to Counterpoint Research on Friday, electric vehicle sales in Southeast Asia, dominated by China's BYD and Vietnam's VinFast, are disrupting the internal combustion engine automobile market currently dominated by Japanese and Korean companies.

According to the research group, EV sales in the region increased by double during the January–March quarter compared to the same period last year. In contrast, ICE car sales decreased by 7%.

Analyst Abhik Mukherjee argues that Chinese OEMs are taking over from Japanese and Korean automakers in the EV market.

He claims that over 70% of EV sales in the region are made by Chinese firms, with BYD leading the pack. Chinese manufacturers manufactured 75% of all EVs sold in Southeast Asia in the first quarter of last year. China has made over $1.44 billion in investments to establish new electric vehicle (EV) manufacturing facilities in Thailand, the second-largest economy in Southeast Asia. During the first quarter of this year, the Southeast Asian car manufacturing cluster accounted for 55% of all sales of electric vehicles. This cluster is home to two significant automakers: Toyota Motor and Honda Motor of Japan. Sales in the category increased by 44% from the prior year.

Vietnam saw impressive growth in the sales of battery electric vehicles (BEVs), with sales increasing by over 400%. BEVs accounted for nearly 17% of regional sales. BYD, the leading electric vehicle manufacturer in China, still controls the majority of the regional market with a 47% share. VinFast, the Vietnamese company, is currently in second place. BYD has found early success in Southeast Asia by partnering with major local companies for distribution, although the region is still a relatively small electric vehicle market.

Tesla, an American electric vehicle manufacturer, experienced a 2% decrease in market share during the first quarter, despite a 37% increase in sales compared to the same period. Southeast Asian countries like Thailand and Indonesia have introduced incentives to increase demand for electric vehicles and attract new investment. Chinese automakers, who are engaged in a domestic price war, have answered this call.