Southeast Asia’s EV shift threatens to sideline local auto-parts makers

Southeast Asia's shift towards electric vehicles (EVs) is putting pressure on smaller automotive component manufacturers in Malaysia, Thailand and Indonesia. Established suppliers rely on Chinese carmakers for established networks and imported components, making it difficult for them to transition to EV production. Factors such as high financing costs, limited access to manufacturers and differing supply chains from Japanese automakers have hindered growth for local component makers.

In Thailand, hybrid vehicle manufacturing supports demand for both conventional engine components and electrical systems, but Chinese EV investments have yet to substantially benefit local suppliers. The Indonesian government faces pressure to help smaller manufacturers connect with EV brands and assembly plants. In Malaysia, local suppliers have yet to benefit substantially from Chinese EV investments, with BYD's recent shift in manufacturing plans limiting local value-added content.

Automotive experts suggest that manufacturers need clearer and more consistent policies from the government and automakers to overcome financial barriers and invest in the EV supply chain.