Electric vehicles (EVs) are quietly but steadily reshaping the transportation landscape in Southeast Asia. According to the International Energy Agency’s latest Global EV Outlook 2025, EV sales in the region are projected to account for nearly 30% of total vehicle sales by 2030. This is a significant leap from current figures, yet it still lags behind the ambitious adoption targets set by several governments in the region.
Take Indonesia, for instance. As Southeast Asia’s second-largest car market, the country has taken several policy steps to encourage EV adoption. A major turning point came in April 2023, when the government introduced a Value-Added Tax (VAT) discount on electric vehicle sales—a move that’s still in effect as of 2025.
In parallel, import duty exemptions are offered to manufacturers who commit to building EV production facilities in Indonesia by 2026. These incentives have helped put Indonesia on track to reach a 25% EV sales share by 2030, up from just 9% in 2025. That would translate into roughly 1 million EVs on Indonesian roads by the end of the decade under the IEA’s Stated Policies Scenario (STEPS). Still, this figure falls short of the government’s own goal of 2 million electric cars and 13 million electric two-wheelers by 2030.
The two-wheeler segment, however, is showing even more rapid potential. Currently under 2% of the market, electric two- and three-wheelers are expected to surge to 30% market share by 2030. While that’s a massive jump, even this optimistic forecast trails behind Indonesia’s official targets. Nonetheless, the country is seen as a regional leader in EV-related industrial policy, blending incentives with production-linked commitments to attract global players and foster domestic growth.
Across the region, similar patterns are emerging. Malaysia, which overtook Thailand in 2024 as Southeast Asia’s largest car market, is offering sweeping benefits for EV buyers, including waivers on import duties, registration fees, and road taxes. These incentives apply until 2025—or until 2027 if the EVs are assembled locally.
Thailand, meanwhile, has updated its EV policy framework to version 3.5, expanding on its previous roadmap to support a broader range of vehicles including electric pickups, motorcycles, and passenger cars. Automakers are given longer timeframes to meet local production quotas in exchange for continued support through purchase subsidies, tax exemptions, and tariff waivers.
Other nations aren’t sitting still either. The Philippines and Vietnam have slashed import duties and excise taxes for EVs, while Singapore has implemented firm mandates as part of its long-term electrification strategy. Together, these efforts represent a coordinated shift across the region, not just toward consumer adoption but also toward EV manufacturing and trade integration.
Bright Prospects, but Still a Long Road Ahead
The IEA report emphasizes that Southeast Asia is quickly positioning itself as a global EV manufacturing hub, thanks to its combined focus on consumer incentives and production-driven policies. Under current conditions, the region is expected to reach 25% EV sales share for passenger vehicles, while two- and three-wheelers are projected to exceed 30%, and electric buses could approach 15% by 2030.
Despite these gains, the report underscores a gap between national ambition and market reality. For example, although Indonesia and Thailand have rolled out strong policy incentives, actual EV penetration will depend heavily on infrastructure readiness, battery affordability, and global supply chain stability.
IEA Executive Director Fatih Birol noted that global momentum remains strong despite economic uncertainties. “This year, over one in four cars sold globally will be electric,” he stated. “By 2030, we anticipate two out of every five new cars worldwide will be electric, driven by falling costs and increasing availability, even in developing markets.”
Price and Policy Will Determine the Region’s EV Future
As the region moves forward, the key to success will lie in maintaining the balance between policy ambition and market execution. Falling battery costs and maturing EV technology are making electric vehicles more affordable, while governments are increasingly fine-tuning incentives to stimulate both demand and local production.
However, the IEA cautions that global economic conditions and trade policy developments could still influence EV growth trajectories. The good news is that Southeast Asia has laid a solid foundation, not only to increase domestic EV adoption but also to emerge as a strategic player in the global automotive transition.
In short, Southeast Asia is no longer an emerging participant in the EV revolution—it’s becoming a pivotal one. And while the region may not meet every ambitious goal by 2030, its current path signals a dramatic transformation in how mobility is powered across the archipelagos and peninsulas of ASEAN.
