BYD Expands Market Share in Southeast Asia, Outperforming Tesla

China’s electric vehicle (EV) giant BYD has established a dominant position in the Southeast Asian market, surpassing Tesla and capturing over 25% of the region’s EV sales. BYD’s success is credited to its partnership model, which involves collaborating with large local conglomerates to expand reach, understand consumer preferences, and navigate complex government regulations. This approach contrasts with Tesla’s independent distribution strategy.

BYD’s focus is on brand proliferation rather than optimizing profit margins. By offering more lucrative profit margins to local dealers, BYD is able to cultivate trust and loyalty, creating opportunities for broader expansion. The company’s regional distributors include divisions of Sime Darby, Bakrie & Brothers, Ayala Corp, and Rever Automotive.

This partnership model is helping BYD gain traction in a region where Chinese car brands lack an established track record. The association with reputable partners gives consumers confidence in aftersales support. Buying an EV from a well-known conglomerate like Sime Darby or Ayala Corp helps dispel concerns and uncertainties.

BYD has made substantial investments in the Southeast Asian market, including the establishment of a new factory in Thailand with a production capacity of 150,000 EVs per year. The company is also actively involved in advertising campaigns and strategic collaborations to promote EV adoption.

In contrast, Tesla currently has a limited presence in Southeast Asia, with only two stores in Singapore and plans to expand to Thailand and Malaysia. BYD’s Southeast Asia playbook, which emphasizes dealership partnerships and localization, has proven successful in reaching a larger consumer base compared to Tesla’s direct-to-consumer approach.

BYD’s strong performance in Thailand, where EV buyers account for 24% of its overseas sales, highlights the company’s success in this market. Conversely, less than 1% of Tesla’s sales come from Southeast Asia.

Overall, BYD’s partnership model and focus on brand proliferation have enabled the company to outperform Tesla in the Southeast Asian market. By collaborating with established local partners, BYD has gained consumer trust and expanded its reach in a region where Chinese car brands traditionally struggle to gain traction.

Sources: Counterpoint Research