Chinese electric vehicle giant BYD has gained a significant market share in Southeast Asia, surpassing rivals such as Tesla. This success is due to BYD’s strategic partnerships with large conglomerates in the region, allowing them to expand their reach, understand consumer preferences, and navigate complex government regulations.
Unlike Tesla’s go-it-alone approach, BYD has focused on brand proliferation rather than optimizing profit margins. By providing more lucrative profit margins to their local dealers, BYD has been able to cultivate trust and loyalty, paving the way for broader expansion.
In the second quarter of 2023, BYD sold over 26% of all electric vehicles in Southeast Asia, with their Atto 3 model being the bestseller in the region. This success is attributed to attractive pricing, making their electric vehicles more accessible to a wider market. In contrast, Tesla prices the most basic Model 3 significantly higher in Thailand.
BYD’s regional distributors include divisions of Sime Darby, Bakrie & Brothers, Ayala Corp, and Rever Automotive. These partnerships have helped BYD overcome the lack of an established track record for Chinese car brands in the region. Buyers feel more confident with the backing of these established players, especially for after-sales support.
Recognizing the potential of Southeast Asia, BYD is investing almost $500 million to build a new factory in Thailand, which will produce 150,000 electric vehicles per year from 2024 for export to Southeast Asia and European markets.
BYD’s success in Southeast Asia highlights the importance of strategic partnerships and a focus on brand building. Their approach contrasts with Tesla’s direct-to-consumer model, which is harder to replicate without the same level of buzz or media presence. However, Tesla is now making moves to expand its presence in the region by opening stores in Thailand and Malaysia.
Overall, BYD’s rapid market share growth in Southeast Asia demonstrates the effectiveness of their partnership model and their commitment to expanding the adoption of electric vehicles in the region.
Sources:
– Counterpoint Research