Tesla and BYD surged to world-dominating heights thanks in part to China, the world’s largest EV market. But with the pace of Chinese growth slowing down, the two EV giants are now looking overseas for more growth opportunities. Tesla, which first triggered a fierce price war in China last year, now sees the nearby region of Southeast Asia as its next opportunity.
Southeast Asia will “be a major place of growth over the coming years in battery storage in electric vehicle adoption,” Rohan Patel, a senior public policy and business development executive, wrote in an X post on Tuesday.
The Tesla executive was responding to a user’s post commemorating the first deliveries of Tesla’s Model Y car in the Southeast Asian country of Malaysia.
Malaysia granted Tesla a license to sell in the country last year. The U.S.-headquartered EV maker also established a head office, service hub and experience center in the Malaysian state of Selangor, and promised to invest in a network of fast charging stations across the country.
Tesla is also in talks with Thailand, the region’s the region’s largest producer and exporter of cars, to build a production facility in the country.
Indonesia is also courting Tesla to set up a base in the country, which holds vast reserves of nickel, a component used in some EV batteries. Indonesian President Joko Widodo even paid a personal visit to Tesla CEO Elon Musk at the SpaceX launch site in Texas in 2022.
Yet Tesla could be racing against time to establish itself as a dominant EV player in Southeast Asia. Chinese EV giant BYD, which overtook Tesla in battery EV sales at the end of last year, is also making a play for the small, but fast-growing market.
BYD sold 26% of all EVs in Southeast Asia, compared to Tesla’s 8% in the second quarter of last year, according to Reuters citing Counterpoint Research. The Chinese EV maker was the top selling EV brand in Thailand, Malaysia and Singapore last year.
BYD is expanding its production in Southeast Asia as well. The EV maker broke ground on its first Thai auto plant last March. The plant, which BYD expects will start operations this year, will have an annual capacity of 150,000 vehicles, destined for both domestic and export markets.
BYD is also investing $1.3 billion to build a factory in Indonesia, according to a senior Indonesian government official at a BYD launch event in early January.