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Market Scale & Structure

Philippine new-vehicle sales have traditionally been a difficult area to measure and interpret accurately, with various automotive data bodies, different methods of classification and certain automotive brands not participating in any of the official groups, like CAMPI, AVID or TMA.

What we want to do with this data is not just report as it is given, but piece together fragmented information, move data around where necessary to make economic sense, and identify the real trends. Doing this provides a stronger foundation for building future forecasts.

To calculate new vehicle sales from 2023 to 2026, we collected data from CAMPI-TMA, AVID, brand websites and PR releases, automotive websites and government sources like the LTO. We then reconciled these different sources to determine what we believe is the best estimate for each year and to build our 2026 forecast.

From 2023 to 2025 there was a cumulative growth of 11.5% in automotive sales, predominantly driven by core Japanese brands such as Toyota, Mitsubishi, Suzuki, Honda and Isuzu. However in 2025 Chinese brands really stepped up, specifically BYD, which broke into third place with over 26,000 vehicle sales. This has accelerated further into H1 2026, when 40% of the top 20 brands were of Chinese origin, while Japanese brands showed year-on-year sales declines, ranging from 9% to 42% over the same time period.

The Passenger-versus-commercial split was one of the biggest areas we wanted to tackle. The key question was how much of the market is actually dedicated commercial use, how much consists of passenger vehicles being used for fleet or other commercial activities, and how much is genuinely private passenger use.

At face value, the industry classifications suggest that around 75-80% of vehicles sold in the Philippines sit within the commercial vehicle segment. But this does not tell the true economic story of how vehicles are actually used.

CAMPI–TMA classifies approximately four out of five vehicles sold by its members as commercial vehicles. However, this is an industry reporting classification rather than a measure of economic use. The CV category includes pickups, SUVs, MPVs/AUVs and vans that are frequently purchased for household or passenger use.

TMS therefore treats the official PC/CV split as a reported classification and separately estimates actual commercial use in Chart 3. Non-member sales are excluded from this PC/CV chart rather than being assigned to categories, where no official classification exists.

The first question we wanted to tackle was how to identify a credible dedicated commercial vehicle segment, vehicles that are predominantly designed and used for commercial use. This would include trucks, buses, light utility vehicles and specific pickup variants that are mainly used for commercial purposes.

Secondly, we needed to estimate how many passenger vehicles are also being used for commercial activities. Examples would include a Toyota Vios used for taxi or TNVS services or a Toyota Avanza used within a company or government fleet.

So we had some work to understand where the economic use was really being attributed within this mixed commercial vehicle segment.

TMS Methodology

The starting premise was that there are really three economic-use layers, not two. The framework below shows how TMS separates private/passenger use, passenger-type vehicles used commercially and dedicated commercial vehicles.

This distinction matters because a Hilux, Innova, Hiace or Vios can be commercially operated without being a dedicated commercial vehicle, while an L300, Carry cab/chassis or medium-duty truck is fundamentally commercial regardless of who owns it.

Once we apply this economic-use framework across the whole market, the picture changes substantially.

As you can see from the chart, TMS estimates that around 23.6% of the Philippine new-vehicle market was used for commercial activities in 2025, compared with the 80% classified as commercial vehicles in the official CAMPI-TMA view. This is a very different picture.

Of the estimated 116,062 vehicles used commercially in 2025, around 52.8% were dedicated commercial vehicles, while 47.2% were passenger-type vehicles being used for commercial activities. That leaves approximately 76.4% of the whole new-vehicle market attributed to private/passenger use.

The important point is that the official CV classification and actual commercial use are answering two different questions. One tells us how the industry classifies a vehicle; the other tries to estimate what that vehicle is actually being used for.

The decline in passenger-type vehicles used commercially, from 58,073 units in 2024 to 54,788 in 2025, should not necessarily be interpreted as a broad decline in commercial mobility. Some of this may reflect disruptions in the types of vehicles traditionally used for commercial activities, notably legacy sedans and pickups, while commercial mobility itself starts to shift towards MPVs, vans, newer electrified vehicles and dedicated commercial models.

This gives us quite a different view from the conventional classification of passenger and commercial vehicles. The chart also shows that the majority of market growth is currently coming from passenger use, while growth in commercial use has been more modest.

How we built the estimates

The 23.6% commercial-use estimate is not taken directly from any single Philippine database. There isn't one. Instead, we reconstructed the market from the bottom up and used registration and transport data to calibrate the assumptions.

Our calculation was:

Passenger-type commercial use = Σ(model sales × TMS estimated commercial-use share)

and:

Private/passenger use = whole market − dedicated commercial − passenger-type commercial use

We then worked through the market model by model.

Our detailed steps

1. We reconstructed the four-wheel sales database, using CAMPI-TMA as our base, then reconciled brands/distributors that were not represented using PADA/AVID information, OEM disclosures, independent-distributor reporting and industry reporting.

2. We built a model-level sales master file, with each brand and model assigned a body type and an economic classification. Sedans/hatchbacks, SUVs/crossovers, MPV/AUVs, pickups and passenger vans initially sit in the passenger-oriented universe. Cargo vans, cab/chassis, workhorse utility vehicles, light trucks, medium/heavy trucks, buses and dedicated/special-purpose products sit in dedicated commercial.

3. Next, we calculated dedicated commercial from the bottom up. This was one of the more robust parts of the exercise, because the vehicle’s physical purpose gave us a strong classification signal. The working 2025 audit, for example, included products such as Toyota Tamaraw, Toyota Lite Ace commercial variants, Mitsubishi L300, Suzuki Carry, Isuzu Traviz, Kia K2500 and dedicated Foton utility products, together with TMA Category III, IV and V truck/bus volumes. Those model/category estimates reconcile to the 61,274 dedicated-commercial units used in the final 2025 view.

4. We did not call pickups, vans and MPVs ‘‘Commercial’’. This was an important step away from traditional industry classification. Pickups such as Hilux, Ranger, Triton, Navara and D-Max remained passenger-oriented at the structural classification level. Similarly, passenger vans such as Hiace/Urvan/Staria were not simply pushed wholesale into dedicated commercial. Instead their likely business/fleet portion was determined at variant level, and captured in the second layer - passenger-type vehicles used commercially.

5. We then estimated commercial use model by model, applying central commercial-use assumptions to models whose Philippine usage clearly crosses over both personal and business use. An example would be the Isuzu D-Max from 2023-2025 where we applied a commercial use share of 30%, 30% and 27.5% respectively.

6. Finally, we used registrations and transport data to calibrate and improve our assumptions. There is no Philippine database that tells us, for every newly sold vehicle, “this one was bought privately” versus “this one will be used commercially.” So we used registration and transport datasets as reality checks around the model-level assumptions rather than pretending that they directly provide annual new-sales end use.

   LTO-derived registration database published through PSA

   This enabled us to view vehicle type and ownership classifications, along with other characteristics. This was useful for understanding the installed base and the relationship between private and for-hire/commercial ownership.

   LTFRB classifications and published information on taxis, TNVS, PUV/shuttle and other franchised transport

   We used this to give us a contextual check on where commercially operated passenger vehicles sit in the market. Again, that was calibration rather than a direct database feed into the 54,064 / 58,073 / 54,788 figures, because LTFRB does not capture every company fleet, rental vehicle, tourism vehicle or commercially operated pickup.

   We call these our TMS economic-use estimates. They are not perfect, but the aim is to give more context around economic use, and, hopefully, provide a more useful picture of how vehicles are actually being used across the Philippine market.

Moving into the next chart, we look at the overall market and what types of vehicles Filipinos are increasingly choosing to buy.

The Market by Body Type

Not surprisingly the growth came from the SUV & Crossovers, followed by the MPV/AUV segment, which is also where some of the biggest technology shifts have been taking place. Chinese brands have pushed hard into these segments with electrified powertrains at attractive price points. Key examples include the BYD Sealion 6, while MG has expanded through its HS hybrids and more recently the G50 PHEV. Toyota has also been electrifying these segments, mainly through the Yaris Cross and the Zenix.

The sedan/hatchback segment is an interesting one because, even though its overall total declined by around 10,000 units, there are some interesting narratives sitting behind those numbers. In 2024, fleet, TNVS and taxi demand was relatively strong, reflected in sales of 43,636 Toyota Vios and 26,313 Mitsubishi Mirage G4 units. In 2025, those numbers fell to 27,811 for the Vios and 17,757 for the Mirage G4, a combined loss of 24,381 units from these two models alone.

In April 2024, LTFRB suspended the planned issuance of 10,000 additional TNVS slots, which may have weakened demand for vehicles such as the Vios and Mirage G4 moving into 2025, but it can’t explain the full decline.

A structural change in the fleet and taxi market was also starting to take shape as operators began electrifying their fleets. One example was the regional partnership between BYD and Grab, aimed at giving Grab fleet partners access to as many as 50,000 BYD vehicles at preferential rates. By June 2025, the Philippine market was also seeing new fully electric taxi fleets, including Grab's EV Taxi Corp partnership and Green GSM's VinFast-based taxi operation.

The other major factor appears to be that more Filipinos are choosing to get more vehicle for their money by moving into the MPV/AUV segment, which grew by around 10.6% in 2025 and more than 26% between 2023 and 2025. Models such as the Avanza, Xpander, Veloz and Raize, together with newer electrified Chinese alternatives, are giving buyers more space and practicality at increasingly competitive price points. So it is quite possible that a portion of former Vios and Mirage G4 buyers are simply moving into taller, larger vehicles, and in some cases into a more electrified powertrain.

Pickup demand also contracted in 2025 as the removal of the excise-tax exemption materially increased prices in H2. Unlike sedans and crossovers, the pickup segment had little high-volume electrified substitution. New-energy entrants such as the BYD Shark 6 DMO and Changan Hunter K50 remained relatively small compared with the established diesel pickup market.

Supply chain and geographic power

In 2025, vehicles sourced from these three markets accounted for around 367,000 units, equal to roughly 75% of the 492,558 total TMS vehicle market.

But the balance of power is starting to shift. Indonesia has emerged as the largest manufacturing source, Philippine assembly remains material and Thailand is becoming more exposed to weakening pickup demand. China is no longer simply a secondary source; it is growing rapidly, and our 2026 forecast puts it on broadly similar terms with Thailand and the Philippines.

The shift becomes even clearer when we look at our 2026 forecast. China-sourced vehicles are forecast to increase from around 57,000 units in 2025 to 82,000 in 2026, growth of almost 44%, even as the overall Philippine vehicle market is expected to contract by 7.6%. Over the same period, sourcing from Indonesia, Thailand and the Philippines all declines.

So China is not simply gaining because the Philippine automotive market is growing. It is taking a much larger share of vehicle supply within a contracting market, which is a much more significant change.

Indonesia is primarily exposed to the big Japanese brands and their MPVs, hatchbacks and SUVs. Key models include Avanza, Raize, Veloz, Fortuner, Zenix and the Yaris Cross from Toyota and the Xpander, Destinator and XForce from Mitsubishi. These nameplates have grown strongly since the pandemic, helping make Indonesia the number one manufacturing source for vehicles sold in the Philippines.

The Philippine local assembly market is focused around Toyota and Mitsubishi, centered on the Vios, Innova and Tamaraw and the Mitsubishi G4, Mirage and the L300. Local assembly therefore remains a material part of the market representing 20% of vehicle sales.

Thailand is where we start to see a more interesting story emerge. Thailand has traditionally been strong in the manufacture of Pickups for the Philippine market, with the Hilux, Triton, Ranger, Navara and D-Max all sourced from there. As we mentioned earlier, the pickup market was hit hard by new excise taxes in mid-2025, which we believe will also have an impact on 2026 shipments from Thailand.

China is the only manufacturing export hub showing rapid growth, rising from around 4% of Philippine new vehicle supply in 2020 to 12% in 2025 and could approach 18% in 2026. That puts China on broadly similar terms with Thailand and the Philippines as a manufacturing source. At its current pace China could become the number 2 source of new vehicles by 2027.

Moving from where the vehicles are actually manufactured and exported from, we now look at the country of origin of the brands themselves and which regions are commanding the Philippine market.

The two obvious data points from chart 6 are the continued dominance of Japanese brands, which accounted for around 80% of the market in 2025, and the rapid rise of Chinese brands, whose share increased from 5.9% in 2023 to 10% in 2025. Our 2026 forecast points to Chinese-origin share rising to around 16.2%, while Japanese-origin share falls to roughly 74.9%. US market share is also softening through Ford’s decline, although this is being partly offset by the growth of Tesla.

In the near term, we don’t see much stopping the growth of Chinese brands. The challenge for the Japanese automotive ecosystem is therefore to protect its dominant market position for as long as possible, while closing the gap with the Chinese brands on technology, electrification and price.

Technology

From 2024 to 2025, electrified vehicle sales rose sharply from around 5% to 12% of the total Philippine automotive market, increasing from approximately 24,000 to 59,000 units.

The transition accelerated further during H1 2026. Among CAMPI–TMA members, electrified vehicles represented 15.3% of sales, but this excludes several important non-member brands, most notably BYD. On a broader whole-market basis, ACMobility subsequently indicated that electrified vehicles accounted for approximately 22.3% of Philippine new-vehicle sales during H1 2026, broadly consistent with TMS’s own reconstruction of around 23% after incorporating our BYD estimate.

Early H2 data suggest that momentum is continuing. CAMPI–TMA members sold 7,086 electrified vehicles in July, while TMS estimates that BYD contributed approximately another 4,000 vehicles during the month. On that basis, CAMPI–TMA and BYD alone would account for roughly 11,100 electrified vehicles, equivalent to around 26% of the broader estimated July market, even before accounting for other non-member electrified brands.

These developments have caused us to revise our 2026 outlook quite significantly. While the overall Philippine vehicle market is still expected to decline by around 7.6%, electrified vehicle sales are now forecast to increase from approximately 59,000 units in 2025 to around 113,000 in 2026. That would lift electrified market share from 12.0% to around 24.8%.

Electrified sales could almost double in a market down 7.6%.

This is important because electrification is not simply benefiting from growth in the wider automotive market. It is taking significant share inside a contracting market, suggesting that the change in powertrain demand is becoming increasingly structural.

What is also becoming clearer is that the Philippine transition is no longer simply hybrid-led. HEVs remain important, but PHEVs and DM-i/DMO vehicles are expanding rapidly, while BEV adoption is also accelerating. Our revised 2026 forecast now puts engine-equipped electrified vehicles at around 83,000 units, or 18.2% of the market, with BEVs reaching approximately 30,000 units, or 6.6%.

Electrification is happening at different speeds across multiple body types, and in many cases these are exactly the segments where Chinese brands and Toyota are focusing their technology. The SUV/Crossover and Sedan/Hatchback categories are currently the key body types driving the electrified market, which makes sense given the number of electrified models BYD, Toyota and other brands now offer across these segments.

What we are likely to see next is a further acceleration in the MPV/AUV and pickup segments over the next 12 months, as more electrified models enter the market and buyers are given a wider choice across different price points and vehicle uses.

Competition and outlook

Over the past decade, the Philippines has become used to the top 10 brands being dominated by Japanese manufacturers, especially Toyota, alongside Ford and usually one of the South Korean brands. Over the last few years that picture has started to change. We now have two established Chinese brands sitting solidly within the top 10 in BYD and MG (SAIC). BYD in particular has shown impressive growth registering over 26,000 sales in 2025, capturing over 5% market share and becoming the third-largest automotive brand in the Philippines.

Toyota and Mitsubishi remain dominant, together accounting for 64% of the total market, but pressure is starting to build, with seven of the top 20 brands now from China.

The reason we have placed country flags next to each brand is to highlight how it’s becoming less about individual brands and increasingly about which automotive regions will shape the electrification era. As you can see from the chart Japan versus China is becoming a key battle, with Ford and Tesla representing the US.

As we reflect on H1 2026, we see a clear acceleration in electrification, even though it looks like the overall market will finish the year lower on total sales.

The Iran crisis also highlighted the Philippines’ volatile relationship with fuel prices, reinforcing the appeal of hybrids and BEVs for buyers looking to reduce their exposure to gasoline prices.

What’s particularly interesting about H1 2026 is how sharply many of the incumbent top 10 brands have declined compared to H1 2025. Ford, Nissan, Isuzu and Hyundai were all down by more than 25%, while even Toyota, the clear market leader, was down 9.3% year on year.

On the other hand, several Chinese brands, particularly BYD, Geely, Jetour and Omoda & Jaecoo, along with VinFast and Tesla, showed strong growth. With a wider choice of electrified vehicles, advanced technology and attractive price points, these newer competitors are gaining market share and starting to reshape the top 20 brands in the Philippines.

Our TMS forecast for 2026 is potentially showing a marked shift in market share as the incumbent brands come under increasing pressure from these electrified newcomers. In 2025 Japanese brands commanded 80% of total sales, with Chinese brands accounting for 10%. Our forecast is now pointing towards approximately 75% market share for Japanese brands and 16% for Chinese by the end of 2026, which would represent quite a significant change in just one year.

Toyota still has a commanding lead and plenty of time to strengthen its position within the evolving electrification landscape. Mitsubishi, however, faces a more immediate challenge, with BYD rapidly closing the gap.

In 2025, Mitsubishi sold around 86,800 vehicles, compared with approximately 26,100 for BYD, a gap of more than 60,000 units. Our 2026 forecast sees Mitsubishi declining to around 75,000 units, while BYD rises to approximately 42,000.

That would narrow the gap between the two brands to only around 33,000 units in a single year.

BYD is therefore still some distance from overtaking Mitsubishi, but the direction of travel is becoming much harder to ignore. If BYD can sustain its growth while Mitsubishi volumes continue to soften, the battle for second place could become a much more realistic question over the next few years.

The bigger picture, however, goes beyond the individual brand rankings. The headline for 2026 may be a smaller Philippine automotive market, but underneath that softer sales number the market is changing quite quickly. Electrification is gaining share much faster than we originally expected even as the overall market contracts, China is becoming more important both as a manufacturing source and through its brands, and competition across the established rankings is becoming much more intense.

At the same time, our economic-use analysis suggests that the market remains far more passenger-oriented than traditional industry classifications imply. So while total vehicle sales may decline in 2026, the types of vehicles Filipinos are buying, where those vehicles are being manufactured, the technology powering them and the brands gaining share are all changing at the same time.

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What can vehicle exports tell us?

We wanted to look at vehicle export data for the Philippines and see what relationships we could find with what Filipinos are actually buying. Can rising exports from particular country help signal future sales growth in the Philippines? And could some of today’s manufacturing hubs come under pressure as electrification or consumer preferences change?

Trade and customs statistics can tell us where vehicles are coming from, but they can’t tell us what vehicles the Filipino consumer actually purchased. Conversely retail sales tell us what Filipinos purchased but not where they were built.

And finding out the answer is not straight forward.

The vast majority of Toyotas and Mitsubishis sold in the Philippines are not manufactured in Japan, but across several Southeast Asia countries depending on the model. The Ford Territory is manufactured in China, while BYD’s vehicles are currently manufactured in China.

When we combine those manufacturing flows with Philippine retail sales, a more interesting story starts to emerge, especially around vehicle types, electrification and changing consumer demand.

What stands out in the chart

Immediately we can see that Indonesia is the largest manufacturing source of vehicles to the Philippines, accounting for around 160,000 vehicles in 2025. Thailand and the Philippines as the next two major manufacturing hubs for Philippine vehicle sales, and it has been this way for over 5 years now. However from 2024 to 2025, for the first time in 5 years, Thailand and Philippine manufacturer numbers slightly declined.

The fastest growing manufacturing source is China, rising from around 11,000 to 57,000 China-built vehicle sales in 2025, and our current forecast estimating 82,000 in 2026, bringing them into the realms of Thailand and Philippine production numbers.

The other noticeable realization was that even though there are 40 plus brands and hundreds of models in the Philippines, 86% of all vehicles sold come from 4 key manufacturing hubs in Indonesia, Thailand, the Philippines and China.

The question that arises from all this is;

Why is the manufacturing map starting to change, and how closely is that reflecting in what consumers are buying?

Before we look into the answers around that question we need to look at the problem we needed to solve, which mainly focused around the fact that vehicle exports, vehicle production and vehicle sales are not the same thing.

The first problem: exports are not sales

There is no single Philippine dataset showing how many vehicles sold locally came from each manufacturing country. Trade data tell us when vehicles cross the border, manufacturers report how many vehicles their factories produce and industry associations and distributors tell us how many vehicles dealers sell.

But these are three distinct data points in the supply chain, and don’t translate into one-for-one vehicle sales data.

Customs arrival ≠ retail sale

A vehicle may arrive from Indonesia in December and remain with the distributor until January or February, before being sold. Customs record the vehicle in one calendar year, while the industry sale is recorded in the next.

China shows why the gap can be much larger

Chinese automotive export statistics report 148,727 vehicles exported to the Philippines during the first half of 2026, enough to rank the Philippines among China’s ten largest automotive export destinations.

This number initially looks extraordinary as there were only around 222,000 vehicles in total sold in the Philippines during H1 2026, and we estimate roughly 40,000 were China-built.

To investigate the gap, we went back to the Philippine Statistics Authority’s detailed H1 2026 import records. Across the main vehicle categories, the raw customs quantities from china came to roughly 150,000 units, remarkably close to the Chinese export number. But this number needs to filter out units that are not completed vehicles. Some entries related to CKD or assembly-related imports, while others contain quantities that are inconsistent with their reported weight and value.

A customs ‘unit’ does not always equal one finished vehicle.

After excluding explicit CKD/component entries and records with weight discrepancies, our working estimate falls to around 49,000 plausible finished vehicles, which includes 39,000 passenger vehicles. This is much closer to the actual China-built Philippine retail sales. The remaining gap can reflect inventory timing, commercial vehicles outside our passenger-market reconstruction and differences in reporting coverage.

Factory production ≠ domestic retail

Domestic manufacturing needs to be treated the same way, and we can use Toyota Motors Philippines (TMP) 2025 domestic output. TMP reported 63,803 were manufactured in 2025, but our TMS model estimates that 61,500 Philippine-built Toyota vehicles were sold domestically during the year. Neither number is wrong, it’s just that one number measures factory output and another measure sales actually reaching customers.

Customs classifications can vary

Customs classifications do not map perfectly to the way the automotive industry reports sales. Passenger vehicles are captured under the HS 8703 number, while pickups and some commercial vehicles sit under different classifications. This is an important detail because exporting countries can have very different vehicles mixes. Thailand is an example where it has substantial exposure to pickups, meaning passenger vehicle data at customs would understate its important role in the passenger vehicle market.

Export data is therefore best understood as a signal and validation tool, not as a direct substitute for retail sales. The china example demonstrates this well with a headline figure of 149,000 exports can sit alongside only around 40,000 China-built vehicles actually sold.

Methodology: we reconstructed the market from the bottom up

What we wanted to figure out how many Philippine vehicle sales were built in each manufacturing country.

We used a four-step approach;

1. Establish total Philippine retail sell-through

For 2025, TMS estimates 492,558 vehicles were sold in the Philippines, consolidating reported sales from CAMPI, TMA, PADA and independent distributors. That total becomes the control number that our manufacturing-origin estimates ultimately need to reconcile back to.

2. Map individual models to their country of final assembly

We then worked through the market model by model, assigning major nameplates to their manufacturing country. This is important because the brand does not tell us where it is made. Ford is a good example, where the majority of it’s Southeast Asia vehicles come from Thailand, but the Ford Territory comes from China.

Toyota & Lexus, show why this exercise is useful, which sold 230,000 vehicles in the Philippines in 2025, but only a small portion of those vehicles came from Japan.

Based on model-level sales and known production locations, we estimate approximately:

• 108,000 were built in Indonesia

• 61,000 were built in the Philippines

• 30,000 were built in Thailand

• 29,000 were built in Japan

Toyota is a Japanese company, but the vehicles it sells in the Philippines are supplied through a much broader Asian manufacturing network.

Indonesian supplies high-volume models such as the Avanza, Veloz, Fortuner and Yaris Cross, while the Vios, Innova and Tamaraw are built locally. Thailand supplies models including the Hilux, while Japan accounts for a smaller share of Philippine volume.

Mitsubishi follows a similar regional pattern, its Philippine-built Mirage, Mirage G4 and L300 sit alongside Indonesian-built models such as the Xpander, Xforce and Destinator, while the Triton and Montero Sport are sourced from Thailand.

BYD sits at the opposite end of the spectrum, with its Philippine sales currently far more concentrated around China.

These examples show why looking only at brand nationality can be misleading. Toyota, Mitsubishi and BYD may compete in the same Philippine market, but the manufacturing networks sitting behind them are very different.

3. Reconcile production, imports and retail sales

Once we had mapped models to their manufacturing locations, we compared those estimates with factory production and import activity. Each dataset represents a different stage in the supply chain:

Factory production → vehicle movement / imports → distributor inventory → retail sale

We therefore do not expect production, customs and retail figures to match perfectly within the same calendar year. Instead, production data help us establish whether the amount of locally manufactured vehicles in our model is plausible, while customs flows help us understand the scale and direction of imported supply.

4. Use customs statistics as a cross-check

Finally, we compare our reconstructed retail-origin series with international trade data. Customs data are valuable because they provide an independent view of where vehicle supply is coming from.

If our model says Indonesia is the Philippines’ largest foreign manufacturing source, for example, we should also expect Indonesia to feature prominently in Philippine vehicle-import statistics.

The same logic applies to Thailand and China.

But as we showed earlier, customs quantities need to be interpreted carefully, as vehicle classifications differ, inventory creates timing gaps and not every reported customs unit necessarily represents one complete retail-ready vehicle.

So we use trade data to test direction, relative scale and changes in sourcing, rather than simply substituting customs numbers for sales.

The result is a manufacturing-origin view of the Philippine market that conventional sales rankings cannot provide.

It tells us not only which brands Filipinos are buying, but also which manufacturing economies are actually supplying those vehicles. When we reconstruct the market this way, one finding immediately stands out: despite the Philippines having more than 40 automotive brands and hundreds of models, the physical supply chain is remarkably concentrated.

Four manufacturing hubs now dominate Philippine vehicle supply

There are now four clear manufacturing hubs supplying the Philippine vehicle market: Indonesia, Thailand, the Philippines and China, representing 424,000 vehicles in 2025, equivalent to roughly 86% of the market. That level of concentration is quite striking when you consider more than 40 brands and hundreds of models compete in the Philippines.

What is changing is not the concentration of Philippine vehicle supply, but the balance of power inside the group.

Indonesia remains the largest manufacturing source by a considerable margin, while Thailand and domestic Philippine production still account for roughly one-fifth of the market each.

China, however, is closing the gap quickly.

Our 2026 base case still has the same four hubs supplying around 86% of the market, but the relative positions become much tighter: Indonesia remains first at around 136,000 vehicles, while Philippine production falls to roughly 90,000, Thailand to 85,000, and China rises to around 82,000.

Indonesia leads today, but the regional balance is shifting

With around 160,000 vehicles sold in the Philippines originating from Indonesia, it was the clear leader in 2025. The reason for that is that it manufactures MPVs, crossovers & SUVs like the Avanza, Veloz, Yaris Cross, Zenix and the Xpander, Xforce and Destinator, which Filipino buyers have been moving towards as their everyday passenger vehicle.

Thailand has traditionally been strong in the pickup and pickup based SUVs such as the Hilux, Ranger, Everest, Triton, Montero Sport, Navara and D-Max. That made Thailand a strong manufacturing hub over the last five years, but that changed last year when excise taxes knocked some of the momentum out of the pick-up market, which we expect to continue into 2026.

Philippine production remains important at around 102,000 vehicles in 2025, but local output is concentrated around a relatively small number of predominately ICE models, which could leave it exposed as the market electrifies.

China is now the fastest growth hub supplying the Philippines

In 2020, we estimate that only around 11,000 China-built vehicles were sold in the Philippines, by 2025 it increased to 57,000 and our 2026 base case is approximately 82,000. That makes the 2026 forecast even more substantial as the overall Philippine market is expected to contract, while China-built vehicles continue to gain market share.

The trend becomes even more convincing when we look at it from three different angles; trade flows, manufacturing share and brand penetration.

Trade flows

Even though imports are not sales, it’s difficult to ignore the scale of H1 2026 supply flow. After removing CKD/component entries and records that didn’t appear to represent complete vehicles, we estimate that around 49,000 plausible finished vehicles arrived from China in the first 6 months alone. That H1 supply figure alone is already approaching the 57,000 China-built vehicles we estimate were sold during the whole of 2025, although the two measures are not directly comparable.

Manufacturing share

China-built vehicles accounted for around 12% of the Philippine market in 2025, and our 2026 forecast puts that number at around 18%, bringing China to a similar scale as Thailand and Philippine domestic production. That’s quite a change over just a 6 year period, and suggests China is moving into the top tier of manufacturing hubs supplying the Philippines.

Brand penetration

In H1 2026 , 8 of the top 20 selling brands were Chinese, while BYD moved firmly into third place behind Toyota & Mitsubishi and became the leading brand in the electrified vehicle segment. This isn’t just Chinese brands either, as Fords top selling vehicle in H1 2026 was the Chinese-built Ford Territory, showing that China’s manufacturing influence extends beyond Chinese-owned brands.

Japan’s role is changing, not disappearing

Japanese brands still dominate Philippine vehicle sales, but their manufacturing footprint is now deeply regional.

Toyota sources Philippine-market vehicles from Indonesia, the Philippines, Thailand and Japan, while Mitsubishi relies on a similar regional network across the Philippines, Indonesia and Thailand.

So Japan’s influence has not disappeared, but evolved over the decades.

Japanese manufacturers still control much of the market through brand ownership, engineering, product development, technology and investment, but the physical production of those vehicles increasingly happens elsewhere in ASEAN.

That distinction matters because it changes how we think about automotive influence.

Brand ownership and manufacturing geography are increasingly two different maps.

The Philippine market remains dependent on a small group of manufacturing hubs, but the mix within that group is starting to change.

The next phase of the market, which we are entering now, will be shaped not just by which brands gain market share, but by which countries are best positioned to manufacture Hybrids and BEVs that Filipinos want, at the right price.

Electrification is not simply changing what powers the vehicle, it is beginning to change which factories and countries supply the Philippine market.

Can the Philippines strengthen its position in the next manufacturing phase?

The Philippines also needs to move towards electrification, or its manufacturing hub position could weaken over time.

This is where Mitsubishi Philippines has stepped up, committing around P7 Billion to manufacture hybrid vehicles at its Laguna plant, with an expected production start date in 2028.

This investment is significant, not only to Mitsubishi but for the local automotive supply chain. Mitsubishi has discussed local battery-pack assembly and the potential for the Philippines to become an export base for other Southeast Asia markets, which will be supported by the government’s new Electric Vehicle Incentive Strategy (EVIS). This is an important step in shifting the direction of the local manufacturing industry and could create new opportunities in the new shift to NEV production.

Conclusion: Different types of demand are reshaping the supply chain

We began this analysis by asking what vehicle export data could tell us about what Filipinos are actually buying. What we found is that exports alone can’t directly answer that question. Exports, factory production and retail sales all measure different stages of the supply chain, and as we found with the China data, numbers can look very different and need interpretation.

But when we combine all three; trade flows, model-level sales and known manufacturing locations, a much clearer picture emerges.

Indonesia’s rise over the past fiver years has benefited from growing demand for MPVs and crossovers. Thailand’s pickup heavy supply base is weakening as demand softens and tax treatment changes. China is growing rapidly alongside electrification and new Chinese brands, while the Philippines stands at a crossroads, between its existing ICE production base and the opportunity to participate in the next generation of electrified production.

So this is becoming more than brand versus brand, but competition between manufacturing ecosystems, and as electrification changes what Filipinos are buying, it begins to change where those vehicles sold in the Philippines are actually built.

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Executive Summary

The automotive industry has traditionally measured success through new vehicle sales. Yet every new vehicle eventually enters a much larger secondary economy. Based on 2025 regional estimates, approximately 9 million used vehicles change hands each year, generating an estimated US$70 billion in annual transaction value and creating significant opportunities for dealerships, lenders, insurers and digital marketplaces.

This report presents a bottom-up assessment of Southeast Asia’s used car economy by analyzing vehicle registrations, ownership turnover, financing penetration, motor insurance and publicly available industry data across six major markets.

Key Findings

• Approximately 9 million used vehicles change hands each year.

• Southeast Asia’s used car economy exceeds US$70 billion annually.

• Used vehicle financing represents more than US$35 billion in annual loans.

• Used vehicle insurance generates more than US$6 billion in annual premiums.

• Market opportunity depends on market structure—not market size alone.

TMS Insight 01

A vehicle is manufactured once, but monetized many times.

Where the Opportunity Lies

Every major Southeast Asian economy has an active used vehicle market, but their size, maturity and accessibility vary considerably. Indonesia represents the region’s largest opportunity by transaction value, followed by Thailand and the Philippines, reflecting differences in vehicle ownership, financing penetration and market maturity.

Transaction value measures scale, but it does not determine how easily businesses can capture that opportunity. The following framework introduces the additional dimensions that shape market opportunity across Southeast Asia.

Figure 1. Estimated annual used car transaction value across Southeast Asia (2025).

Market Size ≠ Market Opportunity

Market size is the starting point for evaluating opportunity, but it is rarely the only consideration. A larger market does not automatically translate into a more attractive business environment, nor does it guarantee commercial success.

Across Southeast Asia, used car markets differ not only in transaction value but also in ecosystem maturity. Financing availability, insurance penetration, dealer organization, consumer trust, digital adoption and regulation all shape how accessible each market is.

Despite its relatively small used car market, Singapore's transparent regulatory framework, well-developed financial system and advanced digital infrastructure make it one of Southeast Asia's most accessible automotive markets.

By contrast, the Philippines combines substantial transaction value with far greater operational complexity. Fragmented dealerships, informal transactions and uneven digital adoption make the market significantly harder to navigate than its more mature regional peers.

Businesses should therefore evaluate opportunities through three complementary lenses:

• Market Size — How much economic value exists?

• Market Accessibility — How easy is it to participate and grow?

• Business Capability — Which businesses have the operating model, capabilities and competitive advantages to succeed?

Throughout thi s report, these three dimensions provide a consistent framework for comparing Southeast Asia’s automotive markets, helping identify not only where the largest opportunities exist, but also which business models are best positioned to succeed.

Figure 2. Evaluating Southeast Asia's used car markets requires more than measuring transaction value. The strongest opportunities emerge where market scale, accessibility and business capabilities align.

*Note: Formula represents a conceptual evaluation model rather than a calculated index.

TMS Insight 02

To understand market opportunity, you must first understand how value is created.

The TMS Market Opportunity Framework explains how opportunity should be evaluated. The next section explores why vehicles generate economic value throughout their lifetime, providing the context for comparing market opportunities across Southeast Asia.

The Lifetime Value of a Vehicle

The automotive industry has traditionally focused on a single event: the sale of a new vehicle. In reality, that sale marks only the beginning of a much longer economic lifecycle.

Over 15 to 20 years, a passenger vehicle may change ownership several times. Each transfer extends the vehicle’s economic lifecycle, generating far more than the exchange of the vehicle itself.

Every ownership transfer creates demand for financing, insurance, registration, inspections, maintenance and aftermarket services. Dealers earn revenue through vehicle sales and after-sales services, lenders originate new loans, insurers issue new policies, and digital marketplaces connect buyers and sellers. Together, these recurring activities create an automotive economy that often exceeds the value generated by the vehicle's original sale.

Figure 3. Every ownership transfer creates new opportunities for dealers, lenders, insurers, service providers and digital marketplaces.

For dealerships, lenders, insurers and digital marketplaces, the opportunity extends far beyond selling vehicles.

TMS Insight 03

The greatest value is created long after the first sale.

Viewing vehicles through this lens fundamentally changes how businesses evaluate opportunity within the automotive industry. Rather than treating a vehicle as a single transaction, it should be understood as a long-lived economic asset that generates recurring revenue opportunities across finance, insurance, servicing and technology. This lifetime value, not annual new vehicle sales alone, underpins Southeast Asia's estimated US$70 billion used car economy.

How Businesses Create Value Throughout the Ownership Lifecycle

Although every transaction begins with the sale of a vehicle, the economic value generated is shared across a broad network of participants. Dealers, lenders, insurers, marketplaces and service providers each capture recurring revenue at different stages of vehicle ownership, creating an automotive economy that extends far beyond the initial sale.

Figure 4. Every ownership transfer generates recurring revenue opportunities across automotive retail, finance, insurance, inspections, digital marketplaces and after-sales services, extending the vehicle's economic lifecycle.

As vehicles change hands throughout their lifetime, these revenue streams repeat with every ownership transfer. Rather than generating economic value only at the initial sale, a single vehicle supports recurring activity across finance, insurance, technology and mobility services for many years.

While every ownership transfer generates recurring economic activity, the ability to capture that value varies significantly across Southeast Asia. Market structure ultimately determines how effectively businesses can capture those recurring revenue opportunities. Having established both how opportunity is evaluated and how value is created, the report now compares Southeast Asia's largest automotive markets through the TMS Market Opportunity Framework.

Comparing Southeast Asia's Used Car Market Opportunities

Southeast Asia’s used car economy is not a single market, but a collection of distinct automotive markets. While every country benefits from rising vehicle ownership, increasing incomes and growing demand for affordable mobility, the structure, maturity and accessibility of each market differ significantly.

Applying this framework reveals that each market creates opportunity in different ways. Indonesia rewards operational excellence at scale; Thailand benefits from ecosystem maturity; Malaysia from operational efficiency; the Philippines from customer orchestration; Vietnam from long-term market development; and Singapore from accessibility and innovation.

This comparison reinforces a central theme of the report: market size alone does not determine opportunity. The strongest opportunities emerge where market characteristics align with business capabilities, enabling businesses to compete successfully within local markets.

Table 1. Comparison of Southeast Asia’s six largest used car markets across economic scale, accessibility, ecosystem maturity and the capabilities required to succeed.

TMS Insight 04

Market structure determines where competitive advantage is created.

The following country profiles apply the TMS Market Opportunity Framework across Southeast Asia’s six largest automotive markets, showing how different market structures reward different capabilities and shape distinct paths to success.

Southeast Asia Country Profiles

Each country profile applies the TMS Market Opportunity Framework to evaluate how market structure shapes long-term opportunity. Rather than evaluating markets on transaction value alone, the analysis considers three complementary dimensions introduced earlier in this report: Market Size, Market Accessibility and Business Capability. Together, these dimensions provide a consistent basis for understanding why markets reward different business models and operating strategies.

Although Southeast Asia’s used car economy exceeds US$70 billion annually, it is not a single homogeneous market. Each has evolved under different regulatory environments, financing systems, digital ecosystems and consumer behaviors, creating distinct competitive dynamics and pathways to growth.

Together, these profiles show that Southeast Asia is best understood not as a single automotive market, but as six distinct market archetypes, each rewarding different business capabilities and competitive strategies.

Indonesia: The Region’s Largest Used Car Economy

Indonesia is Southeast Asia's largest used car economy, generating approximately US$30 billion in annual transactions and representing the region's largest commercial opportunity. Its defining characteristic, however, is not simply scale, it is the operational complexity required to capture that opportunity.

Rising demand for affordable personal mobility and improving household purchasing power have supported steady market expansion since 2019. Used vehicles remain significantly less expensive than new cars, making them the preferred choice for many Indonesian households. As financing has become more accessible, transaction volumes have continued to increase across both organized dealerships and independent sellers.

Operating at Indonesia's scale requires businesses to manage thousands of independent dealers, distribution across more than 17,000 islands and inconsistent vehicle quality standards, making inventory sourcing and maintaining consistent standards more complex. Businesses that combine trusted local partnerships with nationwide operational infrastructure are therefore better positioned to succeed than purely digital competitors.

Indonesia's scale also provides significant opportunities for lenders, insurers and digital marketplaces. A well-developed financial ecosystem allows financing and insurance to become a natural part of the purchasing process, improving affordability while generating recurring revenue for lenders, insurers and marketplaces.

Figure 5. Indonesia's dashboard summarizes the market's scale, growth, accessibility and ecosystem characteristics, providing the factual foundation for the TMS Market Scorecard.

Digital Mobility Ecosystem

Regional platforms including Carro, Carsome and OLX Autos have helped transform Indonesia's used car market through investments in inspection networks, financing partnerships and dealer technology. As these capabilities become more widely adopted, transactions are becoming faster, more transparent and increasingly data-driven.

Rather than simply connecting buyers and sellers, leading platforms are evolving into customer journey orchestrators. By bringing together inventory sourcing, inspections, financing and logistics, they simplify transactions while creating value throughout the ownership lifecycle.

As Indonesia’s scale increases operational complexity, competitive advantage depends less on acquiring inventory than on orchestrating the broader automotive ecosystem. Success requires coordinating dealer networks, maintaining consistent operating standards and delivering reliable, high-quality transactions at national scale. Businesses that execute consistently across this complex operating environment will be best positioned to succeed.

TMS Insight 05

Scale creates opportunity. Operational excellence captures it.

Indonesia's opportunity is defined by scale, but competitive advantage is earned through operational excellence. Businesses that combine trusted local partnerships, disciplined execution and nationwide operating capability will be best positioned to capture Southeast Asia's largest used car opportunity.

Thailand: Southeast Asia’s Most Mature Used Car Ecosystem

Thailand combines substantial market scale with Southeast Asia's most mature automotive ecosystem, creating one of the region's most attractive long-term commercial opportunities. An established automotive industry, sophisticated dealer networks and a well-developed financial system have produced one of Southeast Asia’s most efficient and trusted secondary vehicle markets. With approximately US$15 billion in annual transaction value, Thailand offers one of the region’s most attractive operating environments across the automotive value chain.

Steady growth since 2019 has been supported by stable economic conditions, a large vehicle fleet and a well-established replacement cycle. Used vehicles remain an attractive alternative to new cars, while widespread financing supports demand across both franchised dealerships and independent retailers. Compared with many neighbouring markets, Thailand’s organized dealer sector and consumers’ familiarity with formal used vehicle transactions reduce friction throughout the ownership journey.

Decades of collaboration between dealers, lenders, insurers and vehicle marketplaces have made financing, insurance and after-sales services a natural part of the purchasing process. The result is a transparent, trusted and professionally managed used car market.

This level of coordination creates attractive long-term economics for businesses across the industry. Recurring revenue from financing, insurance and after-sales services creates attractive long-term economics across the automotive value chain.

Figure 6. Thailand's dashboard summarizes the market's size, accessibility and ecosystem maturity, highlighting why it represents one of Southeast Asia's strongest long-term commercial opportunities.

Digital Mobility Ecosystem

Digital channels have evolved alongside Thailand’s established automotive ecosystem. Leading platforms such as One2Car and Kaidee Auto have built large online audiences, while regional operators including Carsome and Carro continue expanding through certified vehicle programs and digital retail capabilities. OEM-certified used vehicle programs have become an important differentiator, providing consumers with greater transparency, higher quality standards and increased purchasing confidence.

Rather than replacing traditional dealerships, digital platforms have become a natural extension of Thailand’s automotive retail network. Consumers begin their vehicle search online before completing their purchase through established dealer networks. This combination of digital channels and physical infrastructure has strengthened customer confidence while preserving the trust that underpins high-value automotive transactions.

Thailand's mature automotive ecosystem shifts competition away from building infrastructure and toward delivering better service, stronger customer relationships and greater operational efficiency. Businesses differentiate themselves by combining digital capabilities with established dealer networks, financing and after-sales services rather than expanding inventory or physical footprints.

TMS Insight 06

Mature markets reward differentiation rather than expansion.

As markets mature, competition shifts from building infrastructure to delivering better service, stronger customer relationships and greater convenience. Thailand's transparent market structure, well-developed financial system and high consumer trust reduce execution risk while raising customer expectations. Businesses that distinguish themselves through superior service, trusted customer relationships and innovation will stand out in an already competitive market. In Thailand, mature infrastructure creates the opportunity, but differentiation determines who succeeds.

Malaysia: Southeast Asia’s Most Efficient Used Car Market

Although smaller than Indonesia or Thailand, Malaysia has developed one of Southeast Asia’s most efficient automotive ecosystems. Strong household vehicle ownership, well-developed institutions and widespread digital adoption have produced a highly organized used car market that consistently outperforms many larger regional peers. With approximately US$8 billion in annual transaction value, Malaysia offers an attractive environment for businesses seeking predictable growth and scalable operating models.

Steady growth since 2019 has been supported by stable economic conditions, high vehicle ownership and a well-established replacement cycle. Used vehicles provide an affordable alternative to new cars, while widespread financing, transparent pricing and an organized dealer network enable efficient transactions. Compared with many neighbouring markets, lower fragmentation and greater market formalization reduce friction while allowing businesses to scale more effectively.

Domestic vehicle manufacturing through Proton and Perodua, alongside international brands with established dealer networks, has created a highly efficient dealer and service network supported by nationwide service centres and strong parts availability. Together, these strengths improve consumer confidence while making vehicle sales, financing and after-sales support more efficient.

Well-developed financing, trusted institutions and nationwide dealer networks create a predictable operating environment where businesses can focus on improving operational efficiency and service quality rather than overcoming structural market constraints.

Figure 8. Malaysia's dashboard highlights the operational efficiency, digital maturity and ecosystem characteristics that make it one of Southeast Asia's most efficient used car markets.

Digital Mobility Ecosystem

Malaysia is one of Southeast Asia’s most digitally mature automotive markets. Regional platforms including Carsome and Carro have established significant operations, while local marketplace Mudah.my remains a leading destination for used vehicle buyers and sellers. Consumers are increasingly comfortable researching, financing and purchasing vehicles online, supported by trusted digital infrastructure and professional market participants.

Rather than disrupting traditional dealer networks, digital platforms have strengthened an already efficient automotive ecosystem. Digital capabilities, financing and insurance reduce transaction friction, improve transparency and reinforce consumer confidence throughout the purchasing process.

Because the underlying ecosystem is already highly organized, competitive advantage depends less on expanding infrastructure than on improving operational performance. Businesses compete by optimizing customer acquisition, streamlining operations and delivering faster, more efficient transactions. In Malaysia, the greatest value is created by businesses that optimize an already efficient ecosystem rather than reinvent it.

TMS Insight 07

Efficient markets reward operational discipline, not scale.

Malaysia demonstrates that ecosystem quality can compensate for market size. Although smaller than Indonesia or Thailand, its efficient institutions, transparent market structure and digital maturity create an environment where operational discipline becomes a competitive advantage. Businesses that execute consistently can generate attractive long-term returns despite operating in a smaller market.

For investors and operators, Malaysia illustrates that ecosystem quality can be just as valuable as market scale. A mature, transparent and digitally connected market provides favorable conditions for sustainable long-term growth across the automotive value chain.

The next profile examines the Philippines, where success depends less on ecosystem efficiency and more on overcoming market fragmentation and execution complexity. While Malaysia rewards operational discipline within an efficient market, the Philippines presents a very different path to creating competitive advantage.

Philippines: A Large but Fragmented Used Car Opportunity

The Philippines combines one of Southeast Asia's largest used car opportunities with one of its most fragmented automotive ecosystems. While approximately US$10 billion in annual transaction value creates substantial commercial potential, success depends less on scale than on the ability to coordinate fragmented dealers, build trusted local relationships and simplify an increasingly complex customer journey.

Rising vehicle ownership and improving household incomes continue to support demand, yet the used car industry remains dominated by thousands of small and medium-sized independent dealers. Many sell only three to five vehicles each month, while even the country’s largest family-owned businesses typically sell only a few hundred vehicles. Unlike Thailand or Malaysia, large used car supermarket models and institutionally backed dealer groups have yet to emerge at meaningful scale.

Because these independent dealers remain the backbone of the industry, trust, reputation and long-standing customer relationships continue to shape purchasing decisions. Although this decentralized structure increases operational complexity, it also creates opportunities for businesses that can organize supply, improve transparency and simplify the customer journey.

The fragmented nature of the market also creates opportunities to integrate services that many independent dealers cannot efficiently provide on their own. Many dealers lack the scale, lender relationships and technology needed to deliver a seamless customer experience, creating opportunities for digital platforms to connect consumers with a broader network of services while strengthening customer relationships throughout the ownership lifecycle.

Figure 10. The Philippines' dashboard highlights the scale, fragmentation and ecosystem characteristics that define one of Southeast Asia's most structurally complex used car markets.

Digital Mobility Ecosystem

The Philippine digital automotive ecosystem reflects the fragmented nature of the broader market. Despite multiple attempts by local and regional operators, no single platform has achieved the nationwide scale seen in Indonesia, Thailand or Malaysia. Business models that have succeeded elsewhere in Southeast Asia have proven more difficult to replicate, reflecting the importance of trusted dealer relationships, dispersed inventory and consumer confidence.

Because most used car businesses remain relatively small, with simple operating models and limited technology budgets, digital adoption has progressed more slowly than in neighbouring markets. Inventory is often managed through manual processes and consumer platforms rather than integrated dealership technology.

Instead of relying on dealer subscriptions or listing fees, platforms that aggregate demand and monetize completed transactions are better suited to the Philippine market because they align with its underlying structure. Dealers continue to own inventory and complete vehicle sales, while platforms focus on orchestrating the customer journey and creating value across the ownership lifecycle.

This brokerage model lowers barriers to dealer participation while shifting platform economics from advertising toward ownership services.

With dealers continuing to own inventory, competitive advantage shifts from asset ownership to customer orchestration. Success depends on coordinating dealer relationships, maintaining marketplace trust and delivering a seamless ownership experience. In the Philippines, businesses that create the greatest long-term value are those that orchestrate the customer journey rather than control vehicle inventory.

TMS Insight 08

Fragmented markets reward customer orchestration.

The Philippines shows that market opportunity alone does not create competitive advantage. Despite its scale, fragmented dealer networks, uneven digital adoption and localized consumer trust make execution significantly more complex than in neighboring markets. Businesses that successfully orchestrate dealers, financing, inspections and customer services will be best positioned to capture long-term value.

In the Philippines, customer orchestration creates the competitive advantage.

Vietnam: Southeast Asia’s Fastest-Growing Used Car Opportunity

Vietnam represents Southeast Asia's strongest long-term ecosystem development opportunity. Although its estimated annual used car transaction value of approximately US$7 billion remains smaller than Indonesia or Thailand today, rapid income growth, rising vehicle ownership and expanding financial infrastructure create one of the region's most compelling long-term commercial opportunities.

The used car market has expanded rapidly since 2019 as private vehicle ownership becomes increasingly accessible to Vietnam’s emerging middle class. Used vehicles remain an affordable entry point for first-time buyers, supporting continued market expansion. Unlike Thailand and Malaysia, which developed their automotive ecosystems over decades, Vietnam is entering a phase where vehicle ownership, financing, insurance and dealer networks are developing simultaneously, allowing businesses to shape the market from the outset.

As market institutions mature and consumer confidence strengthens, Vietnam’s automotive ecosystem continues to evolve. These structural improvements are creating favorable conditions for digital automotive platforms and new finance, insurance and after-sales services.

As first-time vehicle ownership accelerates, Vietnam is creating one of Southeast Asia's largest opportunities to embed financing, insurance and related services into the purchasing process. A growing population of first-time buyers allows businesses to shape customer expectations before long-established purchasing habits become entrenched, creating long-term customer relationships.

Figure 12. Vietnam's dashboard highlights the ecosystem characteristics and long-term growth drivers that position it as one of Southeast Asia's most compelling automotive opportunities.

Digital Mobility Ecosystem

Vietnam’s digital automotive ecosystem is maturing alongside the country’s broader automotive market. Regional platforms such as Carro and Carsome have expanded into the market, while domestic marketplaces including Chợ Tốt Xe and Bonbanh have become important destinations for buyers and sellers. Consumers are completing more of the ownership journey online as dealerships and other ecosystem participants continue to modernize.

Because much of the automotive value chain is evolving simultaneously rather than being layered onto an established market, businesses have an opportunity to design connected purchasing experiences

At this stage of market development, competitive advantage depends less on optimizing existing infrastructure than on helping build it. Businesses that establish trusted brands, scalable operating models and end-to-end purchasing experiences today will be well positioned to influence the industry’s future direction.

TMS Insight 09

Ecosystem builders become tomorrow's market leaders.

The greatest long-term opportunities are created by helping build markets as they develop rather than simply competing within established ones. Strong economic growth, rising vehicle ownership and accelerating digital adoption provide the foundation for sustained expansion over the coming decade. Businesses that establish trusted brands, scalable operating models and enduring customer relationships early will be best positioned to grow alongside Vietnam's automotive market.

Singapore: Southeast Asia’s Most Accessible Used Car Market

Singapore is Southeast Asia’s smallest major used car market, yet it possesses the region’s most mature, digitally connected and operationally efficient automotive ecosystem. Strict regulation, comprehensive vehicle records and strong financial integration have created one of the world’s most transparent and predictable used car markets. With an estimated annual transaction value of approximately US$4 billion, that accessibility can be as important as market size when evaluating business opportunity.

Unlike neighbouring markets, Singapore’s Certificate of Entitlement (COE) system and highly digital regulatory framework create exceptional transparency throughout the vehicle purchasing process. Low transaction risk, reliable pricing and standardized market processes allow businesses to focus on servicie quality and operational excellence rather than overcoming structural inefficiencies.

Although transaction volumes are lower than elsewhere in Southeast Asia, financing, insurance and ownership transfer are already seamlessly connected. This highly coordinated market enables businesses to build recurring customer relationships while operating within one of the world's most efficient automotive environments.

Singapore's advanced digital infrastructure, regulatory transparency and connected financial ecosystem continue to attract innovation across automotive technologies and mobility services.

Figure 14. Singapore's dashboard summarizes the ecosystem characteristics that make it Southeast Asia's most accessible used car market.

Digital Mobility Ecosystem

Singapore has become Southeast Asia’s innovation hub for automotive technology. Regional leaders including Carro and Motorist.sg originated or maintain significant operations in Singapore, supported by one of Asia’s most digitally connected consumer markets. Connected digital services enable consumers to research, finance and purchase vehicles online.

Because the market’s core infrastructure is already well established, innovation focuses on improving convenience, service quality and operational efficiency rather than overcoming structural inefficiencies.

This makes Singapore an ideal environment for developing, validating and scaling new automotive technologies before regional expansion. Businesses can test products, refine operating models and reduce execution risk in a predictable environment before entering Southeast Asia’s larger and more complex automotive markets.

TMS Insight 10

Accessibility can create more value than scale.

Singapore reinforces the report's central conclusion that accessibility can be just as valuable as market size. Although it has the smallest addressable market among the six countries analyzed, its transparent regulatory environment, digital maturity and operational efficiency create one of Southeast Asia's most attractive long-term business environments.

Together, these six country profiles demonstrate that Southeast Asia is not a single used car market, but six distinct market archetypes. Each rewards a different combination of market size, accessibility and business capability. Long-term success depends less on pursuing a single regional strategy than on aligning business models with the structural realities of each market.

Strategic Implications

Throughout this report, we have shown that market opportunity is determined by far more than transaction volume alone. Ecosystem maturity, accessibility, digital adoption, regulation and market structure create six distinct automotive archetypes across Southeast Asia. Understanding these archetypes explains why business models that succeed in one market often struggle in another.

Each archetype rewards a different set of capabilities:

Indonesia: Operational excellence at national scale despite significant geographic complexity.

Thailand: Differentiation within a mature, highly competitive market.

Malaysia: Operational discipline and efficiency rather than scale.

Philippines: Customer orchestration across fragmented dealer networks.

Vietnam: Early ecosystem building before market maturity.

Singapore: Innovation enabled by accessibility, transparency and digital infrastructure.

Taken together, these six market archetypes demonstrate that there is no single winning strategy for Southeast Asia. Success depends on aligning business capabilities with local market structure rather than applying a uniform regional approach. A strategy that succeeds in Singapore's highly accessible ecosystem may struggle in the Philippines' fragmented market, while capabilities developed for Indonesia's operational complexity may be unnecessary in Malaysia's highly efficient environment.

The next section examines how different automotive business models align with Southeast Asia’s six market archetypes.

Winning Business Models Across Southeast Asia

Different automotive business models succeed under different market conditions. Some depend on transaction scale, while others benefit from mature markets, fragmented dealer networks or highly accessible digital environments. These differences explain why a strategy that succeeds in one country may struggle in another.

Choosing the right market is only part of the equation. Long-term success depends on aligning business models with the structural characteristics of each market, ensuring that expansion strategies match local conditions rather than transaction volume alone.

Rather than ranking countries from best to worst, the following framework matches different automotive business models with the market archetypes where they are most likely to succeed.

Figure 16. Different automotive business models thrive under different market conditions. This framework illustrates where each business model is best positioned to succeed across Southeast Asia's six automotive archetypes.

Success in Southeast Asia depends less on choosing the largest market than on identifying where a business model has the strongest structural fit.

TMS Insight 11

There is no single best market, only the best market for your business model.

Success in Southeast Asia's used car economy depends on aligning business models with the characteristics of each market rather than applying a single regional strategy. Businesses that align their capabilities with local market conditions are more likely to succeed than those that rely on a single approach across the region.

The framework presented throughout this report reflects Southeast Asia's automotive industry today. Over the coming decade, advances in digital platforms, embedded finance, insurance and vehicle data will reshape how value is created throughout a vehicle's lifetime. The following section explores the structural trends likely to define the next phase of Southeast Asia's used car economy.

The greatest opportunities in Southeast Asia will belong to businesses that recognize that each market rewards different capabilities. Long-term success comes not from pursuing a single regional strategy, but from aligning business models with the structural realities of each automotive ecosystem.

The Future of Southeast Asia’s Used Car Economy

Southeast Asia's used car economy is entering its next phase of structural transformation. As digital platforms, financing, insurance and vehicle data become more closely connected, buying, financing and owning a vehicle are becoming more transparent, data-driven and convenient. While each country will continue to develop at its own pace, these structural shifts are creating new opportunities for dealerships, lenders, insurers and technology platforms.

The following six structural trends are likely to shape the next phase of Southeast Asia's used car economy.

Figure 17. Six structural trends are reshaping Southeast Asia's used car economy, creating new opportunities for dealerships, lenders, insurers and digital platforms.

TMS Insight 12

The future belongs to businesses that own customer journeys, not individual transactions.

As more of the vehicle purchasing process moves online, consumers increasingly expect financing, insurance, inspections and ownership transfer to work together rather than as separate transactions. Advances in digital platforms, embedded finance and connected vehicle data will accelerate this shift, enabling businesses to build long-term customer relationships rather than relying on a single vehicle sale.

The following section distills these developments into three strategic lessons for businesses operating across Southeast Asia's automotive ecosystem.

Southeast Asia's Next Automotive Growth Story

Every vehicle creates an economic lifecycle that extends far beyond its initial sale, creating recurring demand for financing, insurance, servicing and digital platforms. As this report demonstrates, that secondary economy already represents more than US$70 billion in annual transaction value, making it one of Southeast Asia's most significant long-term mobility opportunities.

1. Vehicles Create Value Throughout Their Lifetime

Although the automotive industry has traditionally measured success through new vehicle sales, a vehicle’s economic lifecycle extends far beyond its initial purchase. Over 15 to 20 years, a single vehicle may change ownership multiple times, creating new opportunities for dealers, lenders, insurers and digital platforms.

Rather than representing a single transaction, each vehicle becomes a long-lived economic asset that generates recurring demand throughout the vehicle's lifetime. This continuous cycle of ownership supports sustained economic activity while creating multiple revenue opportunities across financing, insurance, servicing and technology.

As this report has shown, Southeast Asia’s US$70 billion used car economy is built on this recurring cycle of ownership. For businesses, the greatest opportunity lies not in maximizing the value of a single transaction, but in increasing customer lifetime value across every stage of vehicle ownership.

TMS Insight 13

A vehicle is manufactured once, but its value is created throughout its lifetime.

2. Opportunity Is Determined by More Than Market Size

Throughout this report, one conclusion has remained consistent: market opportunity depends on more than size. Accessibility, ecosystem maturity, digital development, regulation and competitive dynamics all influence how effectively businesses can compete and grow. The most successful organizations align their capabilities with the structural characteristics of each market rather than applying a single regional strategy.

Indonesia rewards operational scale, but capturing that opportunity requires operational excellence and nationwide execution. Thailand combines market maturity with a highly competitive ecosystem, while Malaysia rewards operational efficiency and digital capability. The Philippines favors businesses with strong local relationships, Vietnam offers compelling long-term growth potential, and Singapore demonstrates how accessibility and transparency can create competitive advantage despite its relatively small market.

The lesson is clear: there is no universal definition of the “best” market. Long-term success depends on matching business models and capabilities to local market conditions.

TMS Insight 14

Long-term success depends on aligning business models with market structure, not market size.

3. Integration Is Becoming the Competitive Advantage

The next phase of Southeast Asia's automotive industry will be defined by the ability to connect financing, insurance, servicing and vehicle data into a seamless customer experience rather than offering individual products or services. As more of the vehicle purchasing process moves online, consumers expect these services to work together rather than as separate transactions.

Businesses that orchestrate financing, insurance, servicing and ownership transfer will build stronger customer relationships, increase customer lifetime value and generate more resilient revenue streams than those focused on individual transactions.

This shift is already reshaping the competitive landscape. Businesses are expanding beyond traditional market boundaries by connecting financing, insurance, vehicle data and digital platforms into a seamless customer journey. As the boundaries between dealerships, lenders, insurers and technology providers continue to blur, tomorrow's leaders will be those that orchestrate the entire customer journey rather than compete within a single segment of the market.

TMS Insight 15

Integration, not individual products, will define the next generation of automotive leaders.

The next decade of Southeast Asia's used car economy will be defined not by the number of vehicles sold, but by the value created throughout each vehicle's lifetime. Businesses that align their strategies with local market structure, build integrated customer journeys and invest in long-term ecosystem capabilities will be best positioned to capture that opportunity.

Methodology

This report combines publicly available industry data with proprietary market analysis developed by The Mobility Signal (TMS) to estimate the size of Southeast Asia's used car economy and evaluate commercial opportunities across financing, insurance and digital mobility.

Data Sources

Primary inputs were obtained from a combination of:

• National vehicle registration authorities

• Automotive industry associations

• Central banks and financial regulators

• Insurance regulators and industry associations

• Company annual reports and investor presentations

• Automotive marketplaces and dealer networks

• Publicly available market research and industry publications

These sources were supplemented with TMS analysis to ensure consistency across markets.

Used Car Market Value (GMV)

Annual Gross Merchandise Value (GMV) represents the estimated total value of used vehicle transactions within each market.

GMV estimates were calculated using:

Estimated Annual Used Car Transactions × Estimated Average Transaction Value

Transaction estimates were derived from combinations of vehicle registration data, ownership transfer activity, fleet turnover rates, new vehicle sales and market structure where official used car transaction data was unavailable.

Average transaction values were estimated using marketplace listings, dealer pricing, certified used vehicle programs and publicly available market information.

Used Vehicle Loan Opportunity (Loan TAM)

Loan Total Addressable Market (Loan TAM) estimates represent the potential annual value of used vehicle financing originated within each market.

Loan TAM was estimated using:

Used Car GMV × Estimated Finance Penetration

Finance penetration assumptions reflect the maturity of each country’s automotive lending market, including commercial banks, captive finance companies and specialist automotive lenders.

Motor Insurance Opportunity

Insurance Total Addressable Market (Insurance TAM) estimates represent the potential annual value of motor insurance associated with used vehicle transactions.

Insurance opportunity estimates were developed using:

• Estimated insurance penetration

• Average annual premium levels

• Vehicle financing penetration

• Market structure and consumer purchasing behavior

Insurance opportunity estimates are designed to compare relative market potential rather than forecast future premium volumes.

Market Opportunity Framework

Just before Market Accessibility.

The TMS Market Opportunity Framework evaluates each market across seven structural dimensions:

• Market Size
• Market Growth
• Market Accessibility
• Digital Maturity
• Finance Ecosystem
• Insurance Opportunity
• Market Structure

Overall Market Opportunity is an editorial assessment balancing these dimensions rather than a mathematical average.

Market Accessibility

Market Accessibility is a qualitative assessment developed by TMS to evaluate how easily businesses can create and capture value within each market. Higher accessibility ratings indicate a more favorable operating environment rather than a larger market opportunity.

Factors considered include:

• Dealer network maturity

• Consumer trust

• Digital adoption

• Financing availability

• Insurance penetration

• Regulatory environment

• Market fragmentation

• Operational complexity

Accessibility ratings are intended to compare structural market conditions rather than overall market attractiveness.

Overall Market Opportunity

Overall Market Opportunity is an editorial assessment developed by The Mobility Signal (TMS) that evaluates the long-term commercial attractiveness of each market. Unlike market size alone, it balances structural factors including market accessibility, ecosystem maturity, digital development, financing and insurance ecosystems, competitive dynamics and long-term growth potential.

The assessment reflects the capabilities required to create and capture value within each automotive ecosystem. Markets with smaller transaction volumes may receive higher Overall Market Opportunity ratings if their operating environments are more accessible, transparent or commercially attractive than larger but more operationally complex markets.

Overall Market Opportunity is an editorial assessment rather than a mathematical average of the individual dimensions. It reflects TMS’s view of each market’s long-term strategic attractiveness based on a consistent framework applied across all six countries.

Important Note

All market sizes, transaction values, financing opportunities and insurance opportunities presented in this report represent estimates based on publicly available information and proprietary TMS analysis. Although every effort has been made to ensure consistency and reasonableness, the figures presented should be interpreted as directional estimates designed to support strategic decision-making rather than official market statistics.

The Mobility Signal believes that consistent methodology across markets provides a more meaningful basis for comparison than relying on individual country estimates derived using different assumptions and reporting standards.

About The Mobility Signal

The Mobility Signal is an independent research and advisory publication focused on automotive, mobility, finance and insurance across Southeast Asia. Our research combines public market data with proprietary analysis to help investors, operators and industry leaders understand the region's evolving mobility ecosystem.

Selected References

The analysis presented in this report draws upon publicly available data from government agencies, automotive industry associations, financial regulators, insurance organizations and market research firms. These sources were supplemented with proprietary analysis by The Mobility Signal.

Government & Vehicle Registration

• Land Transportation Office (Philippines)

• Department of Land Transport (Thailand)

• Road Transport Department (Malaysia)

• Singapore Land Transport Authority

• Indonesian National Police Vehicle Registration Statistics

• Vietnam Register

Automotive Industry Associations

• CAMPI – Chamber of Automotive Manufacturers of the Philippines

• Truck Manufacturers Association (Philippines)

• GAIKINDO – Association of Indonesian Automotive Industries

• Federation of Thai Industries (Automotive Industry Club)

• Malaysian Automotive Association (MAA)

• Vietnam Automobile Manufacturers Association (VAMA)

Central Banks & Financial Regulators

• Bangko Sentral ng Pilipinas (BSP)

• Bank Indonesia

• Bank Negara Malaysia

• Bank of Thailand

• State Bank of Vietnam

• Monetary Authority of Singapore (MAS)

Insurance Industry

• Philippine Insurers and Reinsurers Association (PIRA)

• General Insurance Association of Malaysia (PIAM)

• Office of Insurance Commission (Thailand)

• General Insurance Association of Singapore (GIA)

• Insurance Association of Vietnam

• Indonesian General Insurance Association (AAUI)

Automotive Marketplaces & Industry Participants

• AutoDeal

• Carsome

• Carro

• SGCarMart

• One2Car

• Mudah.my

• Chợ Tốt Xe

• Bonbanh

• OLX Autos

• Carmudi

• Motorist.sg

Research & Industry Publications

• Deloitte

• McKinsey & Company

• PwC

• KPMG

• Bain & Company

• Frost & Sullivan

• Mordor Intelligence

• IMARC Group

• Statista

• ASEAN Automotive Federation

Company Reports

• Annual reports and investor presentations from regional automotive technology companies, banks, insurers and publicly listed dealer groups.

Suggested Citation

The Mobility Signal. (2026). Quantifying Southeast Asia’s Used Car Economy: Beyond New Car Sales Lies a US$70B Ecosystem of Transactions, Finance and Insurance.

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In 2023, Kaspi acquired Kolesa, Kazakhstan’s leading automotive marketplace. At first glance, the acquisition seemed unusual, why would one of Central Asia’s most successful fintech companies buy a vehicle marketplace?

While the deal could be viewed as a natural expansion beyond banking into an adjacent category, the deeper rationale is far more interesting. The real value of Kolesa was not the advertising revenue it generated, but the access it provided to consumers at the moment they began researching one of their most significant purchases.

As financial products become increasingly commoditized, competitive advantage is shifting toward customer acquisition, distribution, and proprietary data. For decades, financial institutions started with financial products and then searched for customers. Kaspi reversed the model by owning the platform where consumers search, compare, and make purchase decisions, gaining access to customers before financing, insurance, payments, or other financial services were ever needed.

The marketplace became the acquisition engine, while financial services became the monetization layer, creating a platform capable of capturing value throughout the ownership lifecycle rather than simply a larger bank or a larger marketplace.

Across Southeast Asia, many of the region’s largest digital platforms already control significant consumer attention, while lenders, banks, insurers, and embedded finance providers continue searching for more efficient ways to acquire customers. As these industries become more closely integrated, Kaspi’s acquisition of Kolesa may offer an early glimpse into what the next phase of Southeast Asia’s digital economy could look like.

The growing integration of marketplaces and financial services reflects a broader reality: financial products can often be replicated, while customer access, distribution, and proprietary data are increasingly difficult to replicate. Kaspi recognized this early and built a platform designed to capture value across multiple stages of the ownership lifecycle.

Kaspi’s Ecosystem Strategy

Kaspi is often described as a fintech success story, and the numbers support that characterization. In FY2025, the company generated approximately US$6.3 billion in revenue and US$2.4 billion in net income, making it one of the most profitable digital platforms in emerging markets.

Yet viewing Kaspi primarily as a financial-services company understates what it has actually built.

Its success did not come from creating a better loan product or payment system, but from connecting commerce, payments, and financial services in a way that increases customer engagement and creates multiple opportunities for monetization.

Today, Kaspi's marketplaces attract consumer demand, payments deepen engagement, and financial services generate revenue through lending, banking, insurance, and other embedded products. As more customers and transactions flow through the platform, each layer reinforces the others, creating advantages that are difficult for standalone banks, lenders, or marketplaces to replicate.

This helps explain why Kolesa was far more than a marketplace acquisition. Kaspi itself described the post-acquisition strategy as scaling products around the “car vertical” and integrating the marketplace with its payments, fintech, and government-services platforms, an indication that the value of Kolesa extended far beyond vehicle listings alone.

In isolation, Kolesa is an automotive marketplace connecting buyers and sellers of vehicles through listings, advertising, and related services. Within Kaspi’s broader platform, however, it provides access to customers at one of the most significant purchasing moments in their lives.

A vehicle purchase can become the starting point for financing, insurance, servicing, maintenance, and future replacement transactions, creating opportunities for engagement and monetization long after the initial sale. Rather than entering the customer lifecycle when financing is required, Kaspi seeks to engage consumers while they are still researching vehicles, comparing options, and making purchase decisions.

The most important lesson from Kaspi's strategy is not that it is entering new categories or acquiring additional products, but that it is positioning itself earlier in the decision-making process, allowing financial services to be distributed through customer relationships that already exist.

The Automotive Marketplace Opportunity

The significance of automotive marketplaces extends far beyond vehicle transactions. While the purchase itself is important, the broader opportunity lies in everything that follows. Financing, insurance, registration, servicing, maintenance, parts, toll payments, and eventual vehicle replacement create recurring interactions throughout the ownership lifecycle, transforming what appears to be a single transaction into a long-term customer relationship.

Historically, these interactions have been fragmented across multiple providers. The marketplace helped consumers discover vehicles, the bank provided financing, the insurer provided coverage, and service providers managed the ownership experience thereafter. Increasingly, digital platforms are attempting to connect these interactions within a more integrated customer experience.

What begins as a vehicle purchase can evolve into years of financing, insurance, servicing, and future replacement transactions.

Kaspi’s experience illustrates the economics of this model. By FY2025, payments and marketplace activities contributed approximately 68% of total net income, highlighting how commerce and transaction activity increasingly drive value creation across the platform. The automotive vertical has become one of the clearest examples of this strategy in practice, with e-Cars generating approximately US$2.2 billion in GMV during FY2025.

The value of automotive marketplaces extends beyond audience size alone. Consumers visiting these platforms are often researching one of the largest purchases of their lives, creating a combination of high purchase intent and trusted customer relationships. By helping customers discover vehicles, compare options, connect with dealers, and complete purchases, marketplaces establish valuable relationships before financing, insurance, or other financial products become relevant.

A useful example can be found in the Philippines, where AutoDeal facilitates more than 1,000 vehicle sales each month and participates throughout the decision-making process, from vehicle discovery and comparison to dealer engagement and purchase.

The platform’s strategic significance extends beyond vehicle transactions themselves. By engaging consumers while they are still researching and comparing vehicles, AutoDeal already participates in one of the most influential stages of the ownership lifecycle. The more important question is not how many vehicles are sold through the platform, but how many ownership-related services can ultimately be connected to that customer relationship.

A more integrated model would allow financing, insurance, payments, servicing, maintenance, and future vehicle purchases to be connected around a single customer experience. In that scenario, the marketplace evolves from a customer acquisition channel into a platform that remains relevant throughout the ownership lifecycle, creating opportunities for deeper engagement, richer data, and additional monetization over time.

Viewed through this lens, the value of an automotive marketplace lies not simply in its audience or transaction volume, but in its ability to establish customer relationships before financial products are needed and remain relevant throughout the ownership journey.

The Data Advantage

By engaging consumers before, during, and after a vehicle purchase, automotive marketplaces occupy a unique position within the ownership lifecycle. While lenders and insurers typically interact with customers only when financing or coverage is required, marketplaces can observe a much broader range of customer activity, from initial research and vehicle comparison to purchase, ownership, and eventual replacement.

Each interaction generates valuable signals about preferences, timing, affordability, and future purchasing intent. Over time, these signals combine with transaction data to create a longitudinal view of the customer that extends far beyond a single purchase, allowing marketplaces to develop a deeper understanding of customer needs than any individual lender, insurer, or service provider can achieve in isolation.

As customer profiles become richer, value increasingly shifts from individual financial products to the ability to anticipate customer needs before they become financial transactions.

The marketplace therefore becomes more than a distribution channel. It evolves into a source of proprietary intelligence that helps connect consumers, dealers, lenders, insurers, and service providers through data-driven insights that can improve underwriting, personalization, risk assessment, and product recommendations.

For financial institutions, those insights may ultimately be more valuable than the financial transaction itself.

Why This Matters Now

The growing integration of marketplaces and financial services is being driven by fundamental changes in customer acquisition and distribution.

For decades, banks relied on branch networks as their primary route to customers. Large incumbent institutions invested heavily in physical infrastructure, creating trusted brands, extensive customer relationships, and significant barriers to entry. Customer acquisition was expensive, but once established, these advantages were difficult to replicate.

Digital banking changed the economics of financial services. New lenders, banks, and embedded finance providers can operate with far lower costs than traditional institutions, but they face a different challenge: acquiring customers efficiently and at scale.

At the same time, incumbent financial institutions face growing pressure as consumers increasingly research, compare, and purchase products through digital channels. As more customer interactions move online, the risk is not simply losing transactions, but losing relevance during the earliest stages of decision-making.

Both groups are therefore searching for more effective forms of distribution. Digital financial institutions need lower customer acquisition costs and stronger intent signals, while incumbents need new ways to engage customers before financial products are required.

Marketplaces offer a potential solution because they engage consumers while purchase decisions are still being formed.

Unlike traditional financial channels, marketplaces engage consumers while purchase decisions are still being formed. Whether buying a vehicle, searching for a home, booking travel, or making another major purchase, customers arrive with a clear objective and valuable signals about future financial needs.

This helps explain why partnerships between marketplaces and financial institutions have accelerated globally. One side controls customer demand and distribution, while the other provides financial products. Increasingly, both sides are recognizing that greater value can be created when those capabilities are more closely integrated.

Underlying these developments is a realization that many financial institutions are only beginning to recognize:

The future of finance may not belong to the company that builds the best loan, insurance policy, or payment product. It may belong to the company that owns customer demand, gathers proprietary intelligence, and engages customers before those products are needed.

Southeast Asia: A Similar Opportunity Emerging

Although Kazakhstan and Southeast Asia differ significantly in scale, market structure, and regulatory complexity, many of the dynamics that enabled Kaspi’s success are increasingly visible across the region.

Automotive platforms are becoming important gateways to consumer intent, while banks, lenders, insurers, and embedded finance providers continue searching for more efficient ways to acquire customers. As a result, the interests of both groups are becoming increasingly aligned.

Unlike Kaspi, where commerce, payments, financing, insurance, and ownership services increasingly operate within a connected platform, Southeast Asia’s automotive value chain remains fragmented. Marketplaces, lenders, insurers, payment providers, and ownership-service businesses typically operate independently, each controlling only a portion of the overall ownership experience.

The necessary building blocks already exist. Platforms such as AutoDeal, Carsome, and Carro engage consumers during vehicle discovery and purchase consideration, while banks provide financing, insurers provide coverage, payment companies facilitate transactions, and service providers manage ownership and maintenance.

The opportunity lies not in creating new products, but in connecting existing services around a shared customer experience.

Integration can occur in several ways. Some marketplaces may expand into financial services by embedding financing, insurance, payments, and other ownership-related products directly into their platforms. Others may deepen partnerships with financial institutions while remaining focused on customer acquisition and engagement. In some cases, financial institutions themselves may acquire customer-demand platforms, following a path similar to Kaspi's acquisition of Kolesa.

Partnerships are often the natural starting point because they require less capital, can be implemented quickly, and allow each participant to focus on its core strengths. However, they frequently capture only part of the opportunity. Customers are handed from one provider to another, data becomes fragmented, economics are shared across multiple participants, and no single organization develops a complete understanding of the customer.

As more services become connected, the potential for personalization, proprietary intelligence, and long-term value creation increases. This is particularly important in automotive because the relationship extends far beyond the initial vehicle purchase. Financing, insurance, registration, servicing, maintenance, parts, toll payments, and eventual vehicle replacement all create opportunities for engagement over many years.

Organizations that participate across more of these interactions gain not only additional revenue opportunities, but also deeper customer insights and stronger strategic positioning.

Viewed through this lens, Southeast Asia does not lack the components of a Kaspi-like model.

It lacks integration between them.

Conclusion

Kaspi’s acquisition of Kolesa may ultimately be remembered as more than a fintech company entering automotive classifieds. It illustrates a broader evolution in financial services, where competitive advantage is increasingly being created through customer access, distribution, and data rather than financial products alone.

For decades, financial institutions built products first and then searched for customers. Increasingly, the companies creating the most value are reversing that equation by engaging consumers earlier in the decision-making process and building financial services around those interactions.

The implications extend far beyond Kazakhstan. Across Southeast Asia, automotive platforms, e-commerce companies, super apps, banks, lenders, insurers, and payment providers are all competing to become the primary point of engagement between consumers and financial services. The question is no longer simply who can offer the best loan, insurance policy, or payment solution, but who can engage customers earliest, remain relevant longest, and develop the deepest understanding of their needs over time.

In automotive, the opportunity is particularly compelling. A vehicle purchase is not a single transaction but the beginning of a lifecycle that includes financing, insurance, registration, servicing, maintenance, payments, and eventual replacement. Each interaction creates additional opportunities for engagement, insight, and value creation.

The companies that succeed may not be those that control a single product, but those that connect the greatest number of these interactions into a seamless experience.

Kaspi understood that owning the marketplace meant owning the starting point of that lifecycle. Southeast Asia now has many of the same ingredients in place, from automotive platforms and embedded finance providers to banks, insurers, and digital payment networks.

As customer acquisition, distribution, and proprietary intelligence become increasingly valuable, the future winners may be determined less by the financial products they manufacture and more by their ability to engage customers before those products are needed.

The road to financial services may no longer begin with finance itself.

It may begin with customer ownership.

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Three Transformations, One Physical Constraint

Artificial intelligence, electrification, advanced manufacturing, and the energy transition are reshaping the global economy. Unlike previous industrial cycles, however, these transformations are advancing simultaneously, creating unprecedented demand for many of the same industrial capabilities and placing renewed importance on industrial ecosystems. As these industries compete for semiconductors, critical minerals, electricity, manufacturing capacity, logistics, and skilled labor, competitive advantage is increasingly determined not by leadership in any single technology, but by the ability to build the industrial ecosystems that support them all.

The next industrial competition is not between technologies, but for the industrial capacity needed to deploy them at scale.

The challenge is no longer simply the availability of raw materials, but the ability to expand the systems that extract, refine, manufacture, transport, and deploy them. Mines, refineries, semiconductor fabrication plants, electricity networks, factories, and logistics infrastructure all require years to develop, while demand for new technologies can accelerate within months.

For Southeast Asia, this convergence presents both a challenge and an opportunity. As governments pursue digitalisation, industrialisation, energy security, and electric mobility simultaneously, the region is emerging as an important hub for the supply chains supporting all three transformations. The defining question is no longer whether these technologies will continue to grow, but whether Southeast Asia can build the industrial ecosystem needed to support them at the speed and scale they require.

The Visible Constraints: Semiconductors, Minerals, and Power

Artificial intelligence, electric mobility, and the electrification of energy systems are placing unprecedented demand on three foundational inputs: semiconductors, critical minerals, and electricity. These are the most visible constraints shaping the next phase of manufacturing expansion, not because they are isolated challenges, but because they reveal how dependent modern technologies have become on the same underlying industrial systems.

Semiconductors: The Digital Foundation

Semiconductors underpin nearly every modern technology, from artificial intelligence and cloud computing to electric vehicles, industrial automation, and communications infrastructure. Demand is accelerating simultaneously across these industries, increasing pressure on fabrication capacity, advanced packaging, manufacturing equipment, specialized materials, and engineering talent.

Figure 2: AI infrastructure and electric mobility compete for the same fabrication capacity, packaging, materials, equipment, and engineering talent.

Expanding semiconductor production is an industrial challenge as much as a technological one. New fabrication facilities require billions of dollars in investment, highly specialized equipment, skilled workforces, and years before reaching commercial production. As a result, manufacturing capacity expands far more slowly than demand.

Semiconductors have therefore become strategic industrial assets, with governments investing heavily in domestic manufacturing, supply-chain resilience, and advanced production capabilities.

Critical Minerals: The Material Foundation

Critical minerals underpin batteries, renewable energy, electricity networks, semiconductors, and advanced manufacturing. Growing investment across these industries is driving demand for copper, lithium, nickel, cobalt, graphite, rare earth elements, and other strategic materials.

Global new-energy vehicle sales reached approximately 22 million units in 2025, making electric mobility one of the largest sources of demand for critical minerals. At the same time, artificial intelligence is emerging as another important driver of mineral demand, particularly for copper used in data centres, electricity infrastructure, cooling systems, and grid connections. Together, these industries are placing increasing pressure on the mining, refining, and processing systems needed to supply them.

S&P Global estimates that AI and data centers could generate an additional 2 million metric tonnes of copper demand between 2025 and 2040.

Figure 3: Copper, nickel, lithium, graphite, and rare earth elements support AI infrastructure, electric mobility, and grid expansion simultaneously.

The challenge is not geological scarcity, but the industrial capacity required to bring new supply to market. Expanding mineral production requires years of exploration, permitting, financing, mine development, refining, and processing before commercial production can begin.

The world is not running out of critical minerals; what will matter most is how quickly mining, refining, and processing can scale to meet growing demand.

This creates an opportunity for Southeast Asia and other regional economies, which are investing in downstream processing and advanced manufacturing to capture more value from global supply chains rather than exporting raw materials alone.

Energy Infrastructure: The Defining Industrial Constraint

Reliable, affordable, and scalable electricity underpins every modern industrial ecosystem, supporting semiconductor fabrication plants, AI data centres, electric vehicles, battery factories, renewable energy projects, and advanced manufacturing alike.

Electricity is the common thread linking the industrial transitions explored throughout this report. Semiconductor manufacturing, artificial intelligence, electric mobility, and the energy transition all depend on power systems capable of supporting rapid industrial expansion. As demand rises across these industries simultaneously, generation, transmission, distribution, storage, and grid infrastructure are coming under increasing pressure.

The International Energy Agency estimates that electricity consumption from data centers could more than double by 2030, rising from approximately 415 TWh in 2024 to around 945 TWh by the end of the decade. The additional 530 TWh of annual demand is roughly equivalent to adding a country the size of Germany to the global electricity system, or more than half of Japan’s current annual electricity consumption. Artificial intelligence is only one contributor to this growth alongside electric mobility, industrial electrification, and rising electricity demand across the broader economy.

Long-term forecasts suggest global electricity consumption could approach 60,000 TWh by mid-century, roughly double today’s levels. Meeting that demand will require the equivalent of another global electricity system to be built within the next twenty-five years.

Figure 4: Artificial intelligence, electric mobility, renewable energy, and industrial electrification all depend on the same underlying electrical foundation of generation, transmission, distribution, storage, and grid infrastructure.

Semiconductors power intelligence, critical minerals enable electrification and electricity determines how fast both can grow.

The world is not short of energy resources; solar, wind, hydrocarbons, and nuclear power remain abundant across many regions. The constraint lies in how quickly generation, transmission, storage, and grid infrastructure can be expanded. New power plants often require years of planning and construction, major transmission projects take even longer, and grid upgrades frequently struggle to keep pace with rapidly changing patterns of demand.

These pressures are particularly evident in Southeast Asia, where economic growth, urbanisation, digitalisation, industrial expansion, and rising vehicle ownership are increasing electricity consumption while governments continue investing in renewable energy, industrial development, and digital infrastructure.

The ability to expand energy infrastructure will increasingly influence where investment flows, where manufacturing grows, and which economies capture the greatest value from artificial intelligence, electric mobility, and the energy transition. In this sense, electricity is no longer simply an input to industrial growth, it has become one of its defining enablers.

Southeast Asia: Where the New Industrial Economy Comes Together

Southeast Asia brings together many of the industries shaping the next industrial era, from critical minerals and semiconductor manufacturing to automotive production, digital infrastructure, and rapidly growing electricity demand, positioning the region as a focal point for the resources, infrastructure, and capital supporting all three.

No single Southeast Asian economy participates across every stage of the emerging industrial landscape, instead, the region's strength lies in the complementary capabilities of its economies. Indonesia and the Philippines contribute critical mineral resources, Malaysia strengthens semiconductor manufacturing, Thailand anchors automotive production, Vietnam expands advanced manufacturing and electronics, while Singapore provides regional leadership in finance, logistics, technology, and digital infrastructure. Together, these complementary strengths position Southeast Asia across many of the supply chains supporting artificial intelligence, semiconductors, electric vehicles, and the energy transition (Figure 6).

Figure 6: Southeast Asia's competitive advantage lies in the complementary strengths of its economies, creating a regional industrial ecosystem that supports artificial intelligence, semiconductors, electric mobility, and the energy transition.

The convergence of artificial intelligence, semiconductors, electric mobility, renewable energy, and digital infrastructure is creating a new wave of industrial investment across Southeast Asia. Capturing its full economic potential, however, will depend on the region's ability to expand the industrial capabilities that support these industries, from reliable electricity and logistics to skilled workforces and modern infrastructure.

Malaysia: Semiconductors, Data Centers, and Power Demand

Malaysia illustrates how artificial intelligence is reshaping industrial demand across Southeast Asia. Long established as one of the world’s leading semiconductor manufacturing hubs, the country accounts for an estimated 13% of global semiconductor assembly, testing, and packaging (ATP) activity while continuing to attract investment in advanced electronics. More recently, it has also emerged as one of the region’s leading destinations for hyperscale data centers, driven by strong digital infrastructure, competitive operating costs, and strategic proximity to Singapore.

Between 2021 and the first half of 2025, Malaysia approved RM144.4 billion ( ≈ US$34.0 billion) in data center investments, while Johor alone approved 42 projects valued at RM164.45 billion (≈ US$38.7 billion). According to ISEAS, electricity demand from Malaysian data centres could exceed 5,000 MW by 2035, equivalent to roughly 40% of Peninsular Malaysia’s current peak electricity demand.

Malaysia's success in attracting semiconductor manufacturing and AI infrastructure is shifting the focus from investment attraction to industrial expansion, where sustaining that momentum will require the infrastructure and skilled workforce needed to support continued investment at scale.

Indonesia: Nickel, Batteries, and Downstream Industrialization

Indonesia is the world’s largest producer of nickel, accounting for approximately 51% of global mine production and 42% of global reserves in 2023. As a critical input for lithium-ion batteries, stainless steel, and the broader energy transition, nickel has positioned Indonesia at the centre of global critical-mineral supply chains.

Rather than remaining solely a raw-material exporter, Indonesia has pursued an ambitious downstream industrialization strategy. Export restrictions on unprocessed nickel, combined with large-scale investment in refining, battery materials, and electric vehicle manufacturing, have attracted tens of billions of dollars in industrial investment. Global mining companies, battery manufacturers, and automotive producers have established a growing presence as the country builds an integrated battery and EV manufacturing ecosystem.

Indonesia's next phase of competitiveness will depend on strengthening the industrial capabilities needed to move further up the battery and electric-vehicle value chain.

Philippines: Minerals, Power, and the Untapped Opportunity

The Philippines was the world’s second-largest nickel producer in 2023, with estimated output of around 330,000 metric tonnes, placing it behind only Indonesia in global production. The country also possesses substantial copper, gold, and other critical mineral resources that are becoming increasingly important to electrification, renewable energy, advanced manufacturing, and artificial intelligence infrastructure.

The Tampakan copper-gold project in Mindanao is widely regarded as one of the world’s largest undeveloped copper deposits, with estimated resources of approximately 15 million tonnes of copper and 17.6 million ounces of gold. If developed, projects of this scale could strengthen the Philippines’ position within the supply chains supporting grid expansion, electric mobility, and advanced manufacturing.

While the country’s resource endowment is significant, much of its participation in these supply chains remains concentrated in mineral extraction rather than downstream processing and higher-value manufacturing. Across Southeast Asia, Indonesia has expanded nickel refining and battery production, Malaysia has strengthened its position in semiconductors and data centres, and Thailand has built a competitive automotive manufacturing ecosystem, illustrating the value of developing industrial capacity alongside natural resources.

One of the Philippines’ principal challenges is the availability of reliable and competitively priced electricity. Power costs remain among the highest in Southeast Asia, reducing the competitiveness of energy-intensive industries such as mineral processing, battery materials, semiconductor manufacturing, and data centres. Continued investment in renewable energy, transmission infrastructure, and power-sector reforms could improve these conditions over time.

The country's long-term opportunity lies not only in its mineral resources, but in its ability to build the industrial capacity needed to transform them into higher-value economic activity through expanded energy infrastructure, stronger grid reliability, downstream processing, and advanced manufacturing investment.

Thailand: The Automotive Transition

Thailand has long been Southeast Asia’s leading automotive manufacturing hub, producing approximately 1.5 to 2 million vehicles annually while serving as a major export base for global automakers. As the industry shifts toward electric mobility, the country’s competitive advantage will increasingly depend on its ability to extend that manufacturing leadership into the next generation of automotive production.

Electric mobility is reshaping automotive manufacturing beyond vehicle assembly, increasing demand for batteries, charging infrastructure, semiconductors, power electronics, software, and closer integration with electricity networks. Thailand has responded with incentives designed to attract investment across each of these areas.

Chinese manufacturers, including BYD, Great Wall Motor, and SAIC, have expanded their presence in Thailand, while investment in battery production and EV assembly continues to grow. The transition to electric mobility represents both an opportunity and a strategic imperative. Thailand's long-standing leadership in automotive manufacturing will increasingly depend on how successfully it can adapt its industrial base to electric vehicles, batteries, power electronics, and the wider technologies shaping the future of mobility. Maintaining that leadership will require continual investment in the manufacturing capabilities and supply chains that support the next generation of the automotive industry.

Vietnam: Manufacturing Expansion and Electronics

Vietnam has become one of Asia’s fastest-growing manufacturing centers, benefiting from supply-chain diversification, export-oriented industrialization, and strong inflows of foreign direct investment. Electronics are now among the country’s largest export sectors, with major manufacturers including Samsung, Foxconn, and Intel establishing significant operations.

As manufacturing has become more technologically sophisticated, Vietnam has expanded its role across consumer electronics, industrial equipment, and higher-value technology products. This evolution is increasing demand for semiconductors, reliable electricity, skilled labour, industrial land, and modern logistics while strengthening the country’s position within global manufacturing supply chains.

Sustaining this momentum will depend on expanding the industrial capacity needed to support continued manufacturing growth. Vietnam's ability to attract the next generation of advanced manufacturing investment will increasingly depend on how quickly it can strengthen those supporting capabilities.

Singapore: Digital Infrastructure and Regional Capital

Singapore’s strengths lie not in mineral resources or large-scale manufacturing, but in finance, technology, logistics, and digital infrastructure. The city-state hosts regional headquarters for many of the companies investing across Southeast Asia’s semiconductor, artificial intelligence, renewable energy, and mobility industries, while remaining one of Asia’s leading hubs for data centers, cloud computing, financial services, and technology investment.

Singapore also attracts a disproportionate share of Southeast Asia's venture-capital investment, making it an important gateway for international capital entering the region while reinforcing its role in financing, coordinating, and supporting regional industrial transformation as investment in artificial intelligence, digital infrastructure, and advanced manufacturing continues to grow.

Together, Southeast Asia's economies contribute complementary capabilities across the industries shaping the next industrial era. Indonesia and the Philippines provide critical minerals, Malaysia strengthens semiconductor manufacturing, Thailand expands electric-vehicle production, Vietnam advances manufacturing, and Singapore connects capital, technology, and regional investment.

Capturing the next wave of industrial growth will depend on how quickly Southeast Asia can expand its energy systems, industrial capacity, transport infrastructure, and skilled workforce. The decisions made today on infrastructure, industrial policy, workforce development, and regional cooperation will help determine the region’s position within the global industrial economy for decades to come.

China's Industrial Scale Advantage

China demonstrates what can be achieved when every layer of an industrial ecosystem is developed together. Over the past two decades, the country has expanded mining, refining, manufacturing, electricity generation, logistics, and industrial infrastructure as complementary parts of a single industrial ecosystem. The result is unmatched scale across many of the industries driving artificial intelligence, electric mobility, and the energy transition.

China produced approximately 70% of the world's electric vehicles in 2024, reflecting the scale that can be achieved when manufacturing, supply chains, and industrial infrastructure are developed together.

China did not become a leader in electric vehicles or batteries through a single policy or technology. Industrial capability expanded across the entire value chain through sustained investment in mineral processing, battery materials, vehicle manufacturing, renewable energy, logistics, ports, and industrial infrastructure. Each stage reinforced the next, creating an integrated industrial ecosystem rather than a collection of separate industries.

China's experience suggests that long-term industrial competitiveness depends less on leadership in any single technology than on building the systems that connect resources, manufacturing, energy, infrastructure, and logistics, offering Southeast Asia a different lesson, not to replicate China's scale, but to strengthen the complementary capabilities that already exist across the region.

EVs as Industrial Policy, Not Just Transportation

For many governments, electric vehicles have become less a transportation technology than a platform for industrial policy. Investment in electric mobility is strengthening manufacturing, advanced technology, energy infrastructure, and supply chains, reflecting a broader shift toward building the industrial capabilities that will underpin long-term economic competitiveness.

Electric mobility is strategically important because the capabilities it requires extend well beyond vehicle production. Investment in batteries, charging infrastructure, advanced manufacturing, and supporting supply chains strengthens many of the same industrial systems that underpin artificial intelligence, semiconductors, and the energy transition. For this reason, governments increasingly see electric mobility as a catalyst for building long-term industrial competitiveness.

Global new-energy vehicle (NEV) sales reached approximately 22 million units in 2025, while China accounted for around 70% of global production. These figures illustrate how sustained industrial policy and long-term investment have created manufacturing capabilities that extend well beyond vehicle assembly, encompassing batteries, mineral processing, advanced manufacturing, and supporting supply chains.

Across Southeast Asia, governments are using electric mobility to strengthen manufacturing, attract investment, and deepen regional supply chains. Rather than focusing solely on vehicle production, governments are using EV investment to expand manufacturing, attract capital, deepen supply chains, and strengthen the capabilities that support long-term economic competitiveness.

Success will depend less on the number of electric vehicles a country sells than on how much of the surrounding industrial ecosystem it develops, as investment in batteries, advanced manufacturing, charging infrastructure, and supporting industries strengthens capabilities that extend well beyond the automotive sector.

Conclusion: The Next Industrial Race

The defining competition of the next industrial era will be determined not only by technological innovation, but by the ability to build the industrial systems that support it. Artificial intelligence, electric mobility, advanced manufacturing, and the energy transition increasingly depend on many of the same physical capabilities, including semiconductor manufacturing, critical minerals, reliable electricity, modern infrastructure, and skilled workforces.

These industries may appear separate, yet they are increasingly converging on the same underlying constraint: industrial capacity. The challenge is no longer simply inventing new technologies, but expanding the infrastructure, manufacturing capability, energy systems, logistics, and skilled workforce required to deploy them at scale.

Southeast Asia already possesses many of the ingredients required for long-term industrial competitiveness, including critical minerals, semiconductor manufacturing, advanced industry, digital infrastructure, and growing energy systems. Turning these strengths into a larger role in the next wave of global investment will depend on expanding the industrial ecosystems that connect these capabilities at scale.

As competition for investment intensifies, capital will increasingly flow toward economies that can deploy infrastructure, scale production, integrate supply chains, and continually expand industrial capacity. Countries that strengthen these capabilities will be better positioned to attract advanced manufacturing, technology investment, and higher-value industries. Those that cannot risk remaining concentrated in lower-value activities while future investment is captured elsewhere.

Ultimately, the future will belong not only to those who imagine new technologies, but to those who can build the systems that bring them to life.

Resources

About the data: Statistics presented in this report are drawn from publicly available sources, including the International Energy Agency (IEA), United States Geological Survey (USGS), World Bank, national government agencies, and industry research organizations. Where appropriate, the most recent data available at the time of writing (primarily 2024–2025) has been used. Because reporting periods and methodologies vary across organizations, some figures may differ slightly between sources.

International Organizations

• International Energy Agency (IEA). Global EV Outlook 2025.

• International Energy Agency (IEA). Electricity 2025.

• International Energy Agency (IEA). The Role of Critical Minerals in Clean Energy Transitions.

• International Energy Agency (IEA). World Energy Outlook 2024.

Semiconductors

• Semiconductor Industry Association (SIA)

• SEMI (Semiconductor Equipment and Materials International)

• McKinsey & Company – Semiconductor industry reports

• Deloitte – Global Semiconductor Outlook

Artificial Intelligence & Data Centres

• International Energy Agency (IEA) – Electricity demand from data centres

• Goldman Sachs Research – AI and electricity demand

• S&P Global – AI-driven copper demand

• International Data Corporation (IDC) – Data centre market analysis

Critical Minerals

• United States Geological Survey (USGS). Mineral Commodity Summaries 2024–2025.

• S&P Global Market Intelligence

• International Energy Agency (IEA)

• Benchmark Mineral Intelligence

• International Renewable Energy Agency (IRENA)

Electric Vehicles

• International Energy Agency (IEA). Global EV Outlook 2025.

• EV Volumes

• Rho Motion

• International Council on Clean Transportation (ICCT)

Southeast Asia

Malaysia

• Malaysian Investment Development Authority (MIDA)

• ISEAS – Yusof Ishak Institute

• Malaysian Investment Performance Reports

• Tenaga Nasional Berhad (TNB)

Indonesia

• Indonesia Ministry of Energy and Mineral Resources

• Indonesia Investment Coordinating Board (BKPM)

• USGS

• World Bank

Philippines

• Department of Energy (Philippines)

• Mines and Geosciences Bureau (MGB)

• Reuters (Tampakan Project)

• World Bank

Thailand

• Thailand Board of Investment (BOI)

• Electric Vehicle Association of Thailand (EVAT)

Vietnam

• General Statistics Office of Vietnam

• Ministry of Planning and Investment

• World Bank

Singapore

• Economic Development Board (EDB)

• Enterprise Singapore

• Monetary Authority of Singapore (MAS)

China

• International Energy Agency

• International Energy Agency – Global EV Outlook

• China Association of Automobile Manufacturers (CAAM)

• International Council on Clean Transportation (ICCT)

• BloombergNEF

• World Bank

Supporting Research

• McKinsey & Company

• Boston Consulting Group (BCG)

• PwC

• Deloitte

• World Economic Forum

• OECD

• IMF

• World Bank

• Asian Development Bank (ADB)

News and Industry Sources

• Reuters

• Financial Times

• Nikkei Asia

• Bloomberg

• CNBC

• The Economist

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For much of the past half-century, the global automotive industry was built around specialization, within the overall supply chain. Automakers focused on vehicle development, manufacturing, brand management, and distribution, while specialist suppliers produced everything from engines and transmissions to semiconductors, electronics, glass, and interior components.

This model supported the development of large automotive ecosystems across the United States, Europe, and Japan, each built around closely connected supplier networks that accumulated scale, expertise, and manufacturing capability. Automakers did not need to own every part of the value chain because specialist suppliers could develop individual technologies more efficiently. Competitive advantage came from coordinating the system, maintaining quality, and bringing thousands of components together into a reliable finished vehicle.

The transition towards electric and software-defined vehicles began to disrupt the established supplier-based ecosystem as batteries, semiconductors, software, power electronics, connectivity, and energy-management systems became central to vehicle cost, performance, and customer experience. Unlike many traditional automotive components, these technologies are closely interconnected and cannot always be optimized independently.

China approached the emerging EV industry from a different starting point, drawing less on an automotive ecosystem built around engines, transmissions, and mechanical supply chains, and more on capabilities developed through battery manufacturing, consumer electronics, telecommunications, and the production of mobile phones and other connected devices. These industries had already created deep expertise in batteries, semiconductors, electronics, software, rapid product development, and large-scale manufacturing, which China was then able to extend across the wider EV value chain, including mineral processing, battery materials, cell manufacturing, charging infrastructure, energy storage, logistics, and vehicle production.

BYD is perhaps the clearest expression of this model, having begun as a battery manufacturer before expanding into electronics and vehicle production, which gave it a fundamentally different starting point from traditional automakers adapting systems originally designed around the internal-combustion engine. That background allowed the company to build capabilities across batteries, electric motors, power electronics, semiconductors, software, manufacturing, energy storage, and global logistics, creating a level of integration rarely seen in the modern automotive industry.

The automotive industry is therefore entering a new phase in which the established ecosystems of the United States, Europe, and Japan, built around manufacturing scale, engineering expertise and supplier coordination, are competing with a Chinese ecosystem developed more directly around batteries, electronics, software, energy, and vertically integrated EV production.

Why EVs Changed the Rules

Electric vehicles are organized around a more closely connected technology stack. Battery chemistry influences range, charging performance, safety, weight, and vehicle packaging, while software and power electronics determine how efficiently that energy is managed. Semiconductors support the vehicle’s control systems, connectivity, and driver-assistance functions, and data generated by connected vehicles can feed directly into future software, engineering, and product-development decisions. Changes in one layer now affect the performance of the others, making these technologies more difficult to optimize independently.

This increases the value of closer coordination between battery development, software engineering, electronics, vehicle design, and manufacturing. When these capabilities operate within the same company or a closely connected ecosystem, information can move more quickly, development cycles can shorten, and improvements can be introduced across both hardware and software. Competitive advantage therefore comes not only from manufacturing scale or supplier coordination, but also from controlling selected strategic technologies, shortening feedback loops, and improving the performance of the system as a whole.

China demonstrates how company-level integration can connect with a wider industrial ecosystem, combining control over selected strategic technologies with access to manufacturing capacity, infrastructure, engineering talent, and specialist suppliers across the broader economy. Tesla reached a similar conclusion from a very different starting point.

Tesla and BYD: Different Origins, Similar Conclusions

Tesla and BYD entered the automotive industry from opposite directions, with Tesla emerging from Silicon Valley with strengths in software, artificial intelligence, connectivity, and digital platforms, while BYD began as a battery manufacturer before expanding into electronics, semiconductors, energy systems, and vehicle production. Despite these different origins, both concluded that the technologies shaping vehicle performance, customer experience, and long-term competitiveness were too important to outsource completely.

Their areas of emphasis reflect their different origins, but both seek greater control over the technologies that define vehicle performance, customer experience, and the information generated throughout the vehicle’s lifecycle. By treating vehicles as connected platforms rather than finished products, Tesla and BYD can use software updates, real-world data, and continuous product development to shorten feedback loops and improve future vehicles more quickly. Their convergence suggests that vertical integration is not a single model; companies may control different layers of the stack, depending on their strengths and partnerships, while reaching the same conclusion about the importance of strategic technology and organizational learning.

What This Means for Traditional Automakers

The convergence of Tesla and BYD does not mean that every established automaker must reproduce either model, but it does require manufacturers to reconsider which parts of the emerging technology stack remain suitable for conventional supplier relationships. The traditional system remains highly effective at producing complex, reliable vehicles at scale, although batteries, power electronics, software architecture, vehicle operating systems, and customer data now play a larger role in product cost, performance, development speed, and the customer relationship.

Toyota may be better positioned for this transition than is often assumed because its wider ecosystem already includes substantial capabilities in manufacturing, components, electronics, batteries, logistics, and mobility technology. It does not need to become Tesla or BYD, but it may need to coordinate its group of companies and strategic partners more like an integrated technology platform, retaining greater control over the capabilities that define the vehicle while continuing to rely on specialist suppliers where external expertise and scale remain advantageous.

Ecosystem vs. Ecosystem

The emerging automotive competition is no longer defined only by the capabilities contained within individual companies. Batteries, semiconductors, software, artificial intelligence, manufacturing, charging infrastructure, energy systems, research, capital, and government policy all influence the ability of an automaker to compete, meaning that brands now draw strength from the wider industrial ecosystems surrounding them.

China’s EV leaders benefit from a highly integrated network spanning battery materials, mineral refining, cell production, electronics, software, vehicle manufacturing, infrastructure, logistics, and energy storage. The concentration of talent, production capacity, suppliers, and intense domestic competition allows expertise and product improvements to move rapidly through the system, making speed and continuous learning as important to China’s advantage as cost and scale.

Japan represents a different model, built over decades around manufacturing excellence, quality, reliability, and close coordination between automakers and specialist suppliers. Japanese brands will continue to compete through their products, engineering philosophies, and customer relationships, but their future competitiveness may also depend on how effectively automakers, component manufacturers, technology companies, and research institutions combine their capabilities. Rather than reproducing BYD within each company, Japan may rely on a more federated form of integration in which critical technologies are controlled by individual manufacturers while expensive foundational capabilities are developed across the wider ecosystem.

The United States approaches mobility through its strengths in software, semiconductors, artificial intelligence, computing, venture capital, and technology commercialization. Tesla is the most visible automotive expression of this ecosystem, but companies such as Nvidia, Waymo, and a much broader technology sector will continue to shape the computing and intelligent systems used across the global automotive industry.

Europe continues to combine deep engineering knowledge, advanced manufacturing, safety expertise, regulatory influence, and globally recognized brands. Its challenge is to translate these strengths into more competitive software, battery, and production systems while managing the costs and complexity of the transition.

The next phase in automotive manufacturing may therefore be shaped less by which individual company possesses the strongest position today, but which ecosystem can integrate its capabilities, attract talent, generate learning, and adapt most quickly. Brands will remain the visible competitors in the showroom, but beneath them they will shift further toward the industrial systems of China, Japan, the United States, and Europe. We will clearly see this play out in the competitive broad markets of Southeast Asia.

Southeast Asia: Where the Ecosystems Collide

For all the discussion surrounding batteries, software, industrial policy, and automotive ecosystems, consumers ultimately want a good product at a competitive price. For decades, Japanese manufacturers mastered that formula across Southeast Asia, building reputations around reliability, durability, affordability, resale value, and strong aftersales support. In markets such as the Philippines, brands including Toyota, Honda, Mitsubishi, Nissan, Suzuki, and Isuzu became deeply embedded in the automotive landscape, creating levels of trust that were difficult for new entrants to challenge.

That position is now being tested by Chinese manufacturers offering a different combination of technology and value. Their vehicles now combine advanced driver-assistance systems, connected features, sophisticated interiors, and electrified powertrains at prices that are forcing established brands to respond. Consumers are consequently evaluating vehicles through a broader definition of value that includes software, safety, connectivity, energy costs, and overall product experience alongside traditional considerations such as reliability, service support, and resale value.

Southeast Asia is particularly important because the transition will not follow a single technological path. As explored in our earlier TMS article, The End of the ICE Era, electrification and the disappearance of the internal-combustion engine are related but distinct processes. Markets may become substantially more electrified while hybrids, plug-in hybrids, and range-extended vehicles continue to retain an engine for many years.

This creates a direct test of competing industrial strategies. Japanese manufacturers have generally pursued a multi-pathway approach, drawing on their hybrid expertise and introducing BEVs progressively as infrastructure and consumer demand develop. Chinese manufacturers entered without the same legacy investment in conventional engine production and have built their regional portfolios more heavily around BEVs, plug-in hybrids, and other electrified powertrains, supported by integrated battery supply chains, rapid product development, and localized manufacturing. Japan therefore brings manufacturing depth, dealer coverage, hybrid expertise, and long-standing customer trust, while China brings batteries, software, rapid iteration, aggressive pricing, and newer production investment. American technology continues to influence semiconductors, artificial intelligence, and vehicle computing, while European manufacturers retain strength in premium engineering, safety, and performance.

Few regions provide a clearer view of how these different capabilities perform under the same market conditions. The outcome will not be determined solely by which ecosystem possesses the most advanced technology, but by which can adapt its products to the different economic, infrastructure, and ownership realities of each Southeast Asian market.

Although automotive competition is shifting towards ecosystems, it will still be decided one vehicle at a time. Every purchase represents a judgement about technology, price, performance, reliability, and ownership experience, meaning that the ecosystems most likely to succeed will be those that translate their industrial strengths into products consumers genuinely value at the right price.

Core external references

1. International Energy Agency. Global EV Outlook 2026. 20 May 2026.
   The strongest general source for EV manufacturing, battery supply chains, software-defined vehicles, Chinese production concentration, trade, and Southeast Asian competition.

2. International Energy Agency. Global Supply Chains of EV Batteries. 10 July 2022.
   Supports the description of the EV value chain from raw materials and processing through battery components, cells, and finished vehicles.

3. World Economic Forum and Kearney. From Minerals to Megawatts: Building Resilience for EVs, Data Centres and Power Grids. December 2025.
   Used for the wider value-chain framing, mineral processing, regional concentration, and the importance of coordination across industrial ecosystems. The report is also available in the research library.

4. Adachi, Aya. China’s EV Rise and the Strategic Challenge for Japan’s Automotive Industry. Institut français des relations internationales, 29 April 2026.
   Supports the China–Japan comparison, vertically integrated Chinese supply chains, pressure on Japanese manufacturers, and competition in Southeast Asia.

5. Lyon, Peter. “The Secret Weapon Against China? Toyota Says It’s Collaboration.” Forbes, 27 July 2026.
   Supports the discussion of Japanese manufacturers sharing and standardizing foundational components while continuing to compete in areas customers value.

Toyota and the Japanese ecosystem

6. Toyota Motor Corporation. “Toyota Production System.”
   Supports the historical discussion of Japanese manufacturing efficiency, Just-in-Time production, supplier coordination, quality, and continuous improvement.

7. Toyota Motor Corporation. “Guiding Principles at Toyota.”
   Relevant to Toyota’s long-term relationships with business partners and its collaborative supplier philosophy.

8. Toyota Motor Corporation. “Woven by Toyota to Accelerate Toyota’s Vision for Mobility.”
   Supports the discussion of Arene as Toyota’s software platform and vehicle operating system, as well as software reusability and faster development.

9. Toyota Motor Corporation. “Toyota Unveils New Technology That Will Change the Future of Cars.”
   Supports the BEV Factory, modular vehicle construction, giga casting, self-propelled production, full OTA capability, and Toyota’s “all-in-one team” approach.

10. Toyota Motor Corporation. “TMC Announces Changes to Organizational Structure and Senior Professionals/Senior Management.” 10 May 2023.
    Supports Toyota’s dedicated BEV Factory and cross-functional integration with Woven by Toyota, major suppliers, and regional operations.

BYD and the Chinese ecosystem

11. BYD. “About BYD.”
    Supports BYD’s origins, expansion across electronics, automobiles, energy, and rail transit, and its broader technology-company positioning.

12. BYD. “Batteries.”
    Supports BYD’s presence across battery cells, packs, consumer electronics, new-energy vehicles, and stationary energy storage.

13. BYD. “BYD’s EXPLORER NO.1 Docks in Brazil, Elevating Sustainable Logistics.” 1 June 2024.
    Supports the discussion of BYD’s vehicle-carrier strategy and the Explorer No.1’s capacity of up to 7,000 vehicles.

14. BYD. “4.6 Million NEVs Sold Worldwide in 2025, with Exports Exceeding 1 Million.”
    Supports BYD’s 2025 global sales and export scale.

15. BYD. Investor Relations, “Periodic Reports.”
    Appropriate primary source for company revenue, sales, investment, business-segment, and operational data.

Tesla and software-defined vehicles

16. Tesla. Impact Report 2025.
    Supports Tesla’s wider vertically integrated model across vehicles, batteries, AI, energy, manufacturing, and supply chains.

17. Tesla. “Software Updates” and “Upgrades.”
    Supports the claim that Tesla vehicles continue to receive new features and improvements after delivery through over-the-air updates.

18. Tesla. “Supercharger for Business.” 16 March 2026.
    Supports Tesla’s description of deep integration across charging hardware, power electronics, software, network operation, and manufacturing.

Previous TMS research

19. The Mobility Signal.
    Used for the Southeast Asian discussion, particularly the distinction between electrification and engine elimination, the multi-powertrain transition, and the differing strategies of Japanese and Chinese manufacturers.

20. The Mobility Signal. Engine Transition Framework / Southeast Asian Powertrain Analysis.
    The underlying analysis argues that Southeast Asia consists of several national transitions shaped by consumer economics, charging infrastructure, industrial policy, and manufacturing capability. It also distinguishes the multi-pathway strategy of Japanese manufacturers from the more electrified-first portfolios and vertically integrated supply chains of Chinese manufacturers.

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Executive Summary

Much of the global mobility conversation assumes that electrification follows a similar path across every market. In reality, the transition is shaped by government policy, consumer economics, industrial strategy, infrastructure and manufacturing capability. Different regions are therefore progressing towards lower-emission mobility in very different ways.

Southeast Asia is a clear example of this divergence.

China and parts of Europe have moved further towards higher levels of BEV adoption, while Southeast Asia is developing a more varied mix of powertrain pathways. The region is electrifying through a diverse mix of hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), range-extended electric vehicles (REEVs) and battery electric vehicles (BEVs), with each country progressing through a different combination of technologies.

This report examines five of Southeast Asia’s largest automotive markets: Thailand, Vietnam, Indonesia, Malaysia and the Philippines, seeking to understand why these pathways differ. The analysis shows that electrification is being shaped not only by consumer demand, but also by industrial policy, domestic manufacturing capability, charging infrastructure, housing, geography and the competing strategies of Japanese and Chinese manufacturers.

To better understand this transition, TMS introduces the Engine Transition Framework. Rather than measuring battery electric vehicle adoption alone, the framework distinguishes between Engine-Equipped vehicles (ICE, HEV, PHEV and REEV) and Engine-Free vehicles (BEVs). This provides a complementary perspective on how markets are reducing the role of the internal-combustion engine at different speeds and through different powertrain mixes.

The report argues that Southeast Asia is experiencing a progressive change in the role of the internal-combustion engine. In conventional vehicles, the engine provides all propulsion; in hybrid and plug-in hybrid vehicles, it shares that role with an electric motor; and in BEVs, it disappears entirely.

Southeast Asia should therefore not be viewed as a single electrification market. It represents a collection of national transitions, each shaped by its own economic, industrial and policy realities. Engine-free mobility is expanding, but the pace and powertrain mix of the transition will differ considerably across the region.

Part of the TMS Mobility Framework Series

Why do these markets look so different?

Chart 1 shows that Southeast Asia is not following a single pathway to electrification. The five markets analysed display markedly different powertrain mixes reflecting differences in industrial policy, manufacturing investment, infrastructure, geography, housing, consumer economics and manufacturer strategy.

Vietnam and Thailand have the highest BEV shares, while Thailand also has the largest share of engine-equipped electrified vehicles among the five markets analysed. Malaysia and the Philippines remained predominantly ICE markets in 2025, although H1 2026 developments suggest that electrified powertrains are gaining share. Indonesia sits between these positions, combining a large conventional market with a meaningful and developing BEV segment.

Chart 1. How Southeast Asia is electrifying differently. Powertrain mix of full-year 2025 new light-vehicle sales across the five markets analysed.

Thailand: Leveraging its "Detroit of Asia" Position

Thailand has established itself as Southeast Asia’s leading automotive manufacturing hub over the past six decades, earning the nickname “Detroit of Asia,” with annual vehicle production approaching two million units. To maintain this position as the region transitions towards electrified mobility, Thailand has continued to attract substantial investment. As of May 2026, the country’s Board of Investment had approved 198 EV-related projects, representing more than US$4.1 billion in committed investment across vehicle production, batteries, components and supporting infrastructure.

This strategy has attracted significant investment from Chinese manufacturers, which now compete alongside long-established Japanese automakers. The result is a market where 44.5% of new light-vehicle sales are electrified, comprising 25.1% engine-equipped electrified vehicles and 19.4% battery electric vehicles. Thailand has therefore developed a diversified electrified market in which hybrids and battery electric vehicles coexist.

Supported by a mature manufacturing ecosystem, investment incentives and growing competition between Japanese and Chinese manufacturers, Thailand has developed the most diversified powertrain mix among the five markets analysed.

Vietnam: Building a Domestic EV Champion

Vietnam has followed a different pathway to electrification, driven largely by the rapid rise of domestic manufacturer VinFast. Unlike Thailand, where growth has been supported by a broad mix of international manufacturers, Vietnam’s transition has been anchored by a domestic manufacturer. VinFast’s market presence, charging network and visibility across private and fleet vehicles may have helped make electric mobility more familiar and reduce some of the uncertainty associated with adopting a new vehicle technology.

Government support through reduced registration fees and tax incentives has lowered barriers to adoption. VinFast’s charging-network expansion, together with the electrification of taxi fleets, public transport and corporate vehicles, has made BEVs increasingly visible in everyday life, reinforcing consumer confidence in EV ownership.

During H1 2026, VinFast reported preliminary domestic deliveries of 115,916 electric vehicles, an increase of 72% year on year, which VinFast described as the first time an automotive brand in Vietnam had exceeded 100,000 domestic deliveries in the first half of a calendar year. Supported by government incentives and nationwide charging infrastructure, Vietnam recorded the highest 2025 BEV share among the five markets analysed, with BEVs accounting for 29.0% of new light vehicle sales.

Vietnam demonstrates how a strong domestic manufacturer, supported by coordinated policy, charging infrastructure and fleet adoption, can accelerate the transition towards engine-free mobility.

Indonesia: Building a Regional EV Supply Chain

Indonesia is developing one of the region’s most significant electrification markets. In 2025, BEV sales accounted for 13.3% of new light-vehicle sales, while the total electrified share reached 18.3%. Although the market remains at an early stage of the engine transition, BEV adoption is expanding rapidly.

This momentum has been supported by government policy and substantial investment from Chinese manufacturers, including BYD, Wuling and Chery. Measures such as reduced VAT for qualifying EVs, import-duty concessions linked to local manufacturing commitments and minimum local-content requirements have encouraged automakers to establish production facilities while improving the affordability of BEVs.

Indonesia was the world’s largest producer of mined nickel in 2024, accounting for an estimated 62% of global production. In June 2025, the country broke ground on an integrated nickel and battery supply-chain project valued at approximately US$5.9 billion, developed by a consortium involving ANTAM, Indonesia Battery Corporation and CATL-linked partners. The project extends across the battery value chain, from nickel mining and processing in East Halmahera to cathode materials, battery recycling and battery-cell manufacturing in Karawang. These investments reinforce Indonesia’s ambition to move beyond mineral production and become a regional battery and EV manufacturing hub.

Malaysia: An Emerging BEV Market

In 2025, Malaysia remained at an early stage of the engine transition. BEVs accounted for 3.6% of new light vehicle sales, while a further 4.4% came from electrified vehicles that still retained an engine. Together, this meant that 96.4% of vehicles sold remained engine-equipped, reflecting a market where electrification was growing but technologies that retained an engine still dominated.

H1 2026 provided an early indication that BEV adoption may be entering a faster growth phase. Battery electric vehicle sales more than doubled, increasing by 106% to 26,192 units, narrowly exceeding reported hybrid sales during the six-month period (25,590 units) for the first time. This shift was driven by the launch of affordable locally assembled models such as Proton’s e.MAS range, supported by tax incentives, preferential road-tax treatment, and policies encouraging domestic EV production.

Despite this momentum, charging infrastructure remains concentrated around major urban centres, while subsidised RON95 petrol continues to make conventional vehicles and hybrids highly competitive for many consumers. Malaysia demonstrates how affordable locally assembled EVs can rapidly reshape consumer demand once pricing reaches mass-market levels, even while infrastructure and fuel economics continue to influence purchasing decisions.

Philippines: Electrification Driven by Consumer Economics

The Philippines recorded the lowest 2025 BEV share among the five markets analysed, with BEVs accounting for 1.9% of new light-vehicle sales, while 98.1% remained engine-equipped (Chart 1). Unlike several neighbouring markets, however, its transition is being driven less by direct purchase subsidies and more by consumer efforts to reduce exposure to rising and volatile energy costs.

Government policy has lowered acquisition costs through zero import tariffs and preferential tax treatment for electrified vehicles rather than direct cash incentives. Fuel costs became especially salient during H1 2026, when conflict involving Iran and disruption risks in key oil-shipping routes contributed to renewed global price volatility.

For most motorists, charging availability remains the larger constraint, as public infrastructure is still concentrated around Metro Manila and nearby provinces. According to Deloitte’s 2026 Global Automotive Consumer Study, 62% of surveyed Philippine consumers intending to acquire an electrified vehicle identified lower fuel costs as a leading motivation, while 48% identified limited public charging infrastructure as a key drawback. Hybrids and plug-in hybrids therefore offer a practical alternative, reducing fuel consumption without restricting provincial or long-distance travel.

Electrification accelerated sharply during H1 2026. Among CAMPI–TMA members, electrified vehicles accounted for 15.3% of sales, with 17,148 HEVs, 5,531 PHEVs and 8,702 BEVs sold during the six-month period. However, this excludes several important non-member brands, most notably BYD. On a broader whole-market basis, ACMobility subsequently indicated that electrified vehicles accounted for approximately 22.3% of all Philippine new-vehicle sales during H1 2026. This is broadly consistent with TMS's own reconstruction, which puts the share at around 23% after incorporating our estimate for BYD. That compares with TMS's reconstructed whole-market electrified share of 12.0% in full-year 2025, suggesting that the transition accelerated much faster during the first half of 2026 than the CAMPI–TMA figures alone would imply.

Figure 1. Electrification pathways across Southeast Asia. Key market drivers and current pathways across the five markets analysed.

Rethinking the Transition

The country case studies demonstrate that there is no single pathway towards electrification in Southeast Asia. Each market is developing a different mix of hybrid, plug-in hybrid and battery electric vehicles in response to local economic, industrial and infrastructure conditions.

These differences expose a limitation in how the automotive industry typically measures progress. Headline comparisons often focus primarily on BEV market share, treating all non-BEV powertrains as a single residual category. While useful for tracking BEV adoption, this approach does not show whether electrification is occurring through vehicles that retain a combustion engine or through vehicles that eliminate it.

To provide a complementary perspective, TMS introduces the Engine Transition Framework, which groups new light-vehicle sales into two categories:

• Engine-equipped: Internal-combustion-engine vehicles (ICE), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (REEVs).

• Engine-free: Battery electric vehicles (BEVs).

Measuring the engine transition

Engine-free share is the percentage of total new light-vehicle sales accounted for by BEVs.

Engine-equipped share is the percentage accounted for by vehicles that retain a combustion engine, including ICE, HEV, PHEV and REEV vehicles.

For the categories used in this report, engine-equipped share equals 100% minus engine-free share.

Under this classification, engine-free share is numerically equivalent to BEV market share. The frameworks contribution is a different interpretation of the market: it makes explicit the proportion of new vehicles that retain a combustion engine and the proportion that have eliminated it.

The framework measures the structural presence or absence of the combustion engine. It does not measure lifecycle emissions, fuel consumption, electric kilometres traveled or the relative environmental performance of individual powertrains.

This provides the basis for the analysis that follows.

Chart 2. The Engine Transition in Southeast Asia. Engine-equipped and engine-free shares of full-year 2025 new light-vehicle sales. Indonesia and Vietnam figures are preliminary.

Source: TMS Mobility Framework analysis of government, industry-association and manufacturer data.

Understanding the Engine Transition

Chart 2 shows that engine-equipped vehicles continued to account for most new light-vehicle sales in every market included in the analysis.

Vietnam and Thailand recorded the highest BEV shares, yet 71.0% and 80.6%, respectively, of new light vehicles sold in 2025 still retained a combustion engine. Engine-equipped shares were 86.7% in Indonesia, 96.4% in Malaysia and 98.1% in the Philippines.

The comparison shows that growth in electrified-vehicle sales does not translate directly into an equivalent reduction in the share of vehicles retaining an engine. In several markets, much of the transition is occurring through hybrids and plug-in hybrids, which combine electric propulsion with the range and refuelling infrastructure associated with conventional vehicles.

Their real-world benefits vary according to vehicle architecture and usage, particularly how regularly plug-in vehicles are charged. Nevertheless, engine-equipped electrified vehicles are likely to remain an important part of Southeast Asia’s transition alongside BEVs.

Strategic Outlook

1. Multiple Pathways

One of the strongest themes emerging from recent academic research and industry analysis is that there is no single pathway towards electrification in Southeast Asia.

China and parts of Europe are further advanced in BEV adoption than most Southeast Asian markets, although their policy and industrial pathways remain distinct. No single factor is determining how a market electrifies, with each market responding to its own mix of consumer economics, infrastructure, industrial capability and government policy. These factors shape not only the pace of electrification, but also the technologies consumers ultimately adopt.

The country analysis reflects that same pattern, with Thailand, Vietnam, Indonesia, Malaysia and the Philippines each displaying a distinct transition pathway.

The result is a region that cannot be explained through a single technology or a single transition model. Instead, Southeast Asia represents a collection of national transitions, each progressing at its own pace and through its own combination of electrified technologies.

Consumer economics

On a country-by-country basis, consumer economics remain among the strongest influences on how markets electrify. In emerging economies, vehicle affordability, financing options, fuel prices and the total cost of ownership often matter more than the technology itself. Consumers ultimately buy the vehicle that best fits their budget and everyday needs, rather than the one with the newest drivetrain.

Infrastructure

Markets with well-developed charging networks and reliable electricity are naturally better positioned to accelerate battery electric vehicle adoption. Where charging remains limited, usually outside of the major cities, or where many consumers live in apartments, condominiums or rural areas without convenient home charging, HEVs and PHEVs may offer a more practical option.

Industrial Capability

Countries with an established automotive manufacturing base, domestic vehicle production or significant battery investment have generally transitioned more quickly than those that rely primarily on imported vehicles. Manufacturing ecosystems influence not only what vehicles are available, but also where manufacturers choose to invest for the future.

Government Policy

Long-term industrial strategies, investment incentives, local content requirements and regulatory certainty help shape manufacturer investment, while tax policies and consumer incentives influence purchasing decisions. The strongest outcomes tend to occur where policy, industry and infrastructure evolve together.

The result is a region where no two markets are transitioning in exactly the same way. The five markets analysed display different levels and forms of electrification. Looking beyond battery electric vehicle market share provides a more complete understanding of how Southeast Asia's automotive market is evolving.

2. Competing Industrial Strategies

Consumer demand, infrastructure and policy help explain why markets develop differently. The other side of the transition is shaped by the strategic choices of vehicle manufacturers. Japanese manufacturers have spent decades building extensive manufacturing, supplier and dealer networks across Southeast Asia, while Chinese manufacturers have entered the region with newer production investments and product portfolios centred more heavily on electrified vehicles.

As electrification has accelerated, most Japanese manufacturers have continued to pursue a multi-pathway strategy, with hybrid and plug-in hybrid vehicles remaining at the core of their regional portfolios while battery electric vehicles are introduced progressively. This reflects both their long-standing strength in hybrid technology and the reality that many Southeast Asian markets are still developing the charging infrastructure, consumer affordability and policy settings needed to support large-scale battery electric vehicle adoption. Rather than accelerating away from the internal-combustion engine, Japanese manufacturers have generally focused on progressively reducing the engine’s role within the powertrain, aligning their product portfolios with the different stages of market development across the region.

Chinese manufacturers have entered Southeast Asia from a very different starting point. Without the same legacy of conventional vehicle production across the region, they have built their product portfolios around electrified power-trains from the outset. While battery electric vehicles remain central to their strategy, many Chinese manufacturers have entered ASEAN markets with portfolios centred on BEVs and plug-in hybrids, while also expanding into hybrids and range-extended vehicles. Supported by vertically integrated battery supply chains, rapid product development and highly competitive pricing, they have been able to respond quickly to changing market conditions while investing heavily in local manufacturing across Thailand and Indonesia.

The result is a region where multiple technologies, multiple manufacturer strategies and multiple transition pathways now coexist. Rather than following a single route towards electrification, Southeast Asia is demonstrating that there are many ways to reduce dependence on the internal-combustion engine, each shaped by the realities of the market it serves.

3. From Electrification to Engine Elimination

Figure 2. The Engine Transition Framework. An illustrative spectrum showing how the role of the internal-combustion engine changes across ICE, HEV, PHEV, REEV and BEV powertrain architectures.

Note: The technologies shown do not necessarily represent sequential stages. Markets may adopt different combinations simultaneously according to consumer needs, infrastructure, policy and industrial capability. The position of a powertrain on the spectrum is illustrative; actual engine use, electric driving and emissions depend on vehicle architecture, charging behaviour and operating conditions.

The Engine Transition Framework presents an illustrative spectrum of powertrain architectures, showing how the role of the combustion engine changes as electric propulsion becomes more prominent.

In a conventional ICE vehicle, the engine provides all propulsion. In a hybrid vehicle, it shares propulsion duties with one or more electric motors. In a plug-in hybrid, a larger battery can provide a greater proportion of everyday driving when the vehicle is regularly charged. In the range-extended architecture illustrated here, the wheels are driven electrically and the engine functions primarily as an onboard generator. In a battery electric vehicle, the combustion engine is eliminated entirely.

The spectrum does not represent a prescribed or sequential pathway. Markets may adopt different combinations of these technologies simultaneously in response to consumer needs, infrastructure, policy and industrial capability.

Its strategic value is to distinguish between two forms of change: increasing the share of vehicles that eliminate the engine, and reducing the engine’s role within vehicles that continue to retain one.

4. Strategic Implications

1. Southeast Asia is not one EV market

Perhaps the most important finding from this report is that Southeast Asia should no longer be viewed as a single electrification market, but as a group of individual markets each shaped by its own combination of industrial policy, consumer economics, infrastructure and manufacturing capability.

• Thailand: A diversified HEV and BEV market supported by a mature manufacturing base.

• Vietnam: Recorded the highest 2025 BEV share among the five markets analysed, supported by domestic manufacturing and a rapidly expanding charging network.

• Indonesia: An industrial strategy centred on batteries, mineral resources and local vehicle production.

• Malaysia: An emerging BEV market, supported by incentives, local assembly and urban charging growth.

• Philippines: A rapidly expanding engine-electrified market, with HEVs and PHEVs playing important roles alongside accelerating BEV adoption.

The implication is clear: a single regional product strategy is unlikely to reflect the realities of each Southeast Asian market.

2. Infrastructure shapes technology adoption

Charging infrastructure influences more than the pace of electrification; it also influences which technologies consumers adopt. Markets with broad, reliable charging access are better positioned to support BEV adoption. Where public or home charging remains constrained, hybrids and plug-in hybrids may offer a more practical route to lower fuel consumption and greater electrification.

Infrastructure therefore shapes not only how quickly markets electrify, but how they electrify.

3. Industrial policy is becoming a competitive advantage

Long-term industrial policy extends beyond consumer incentives. Thailand has used investment policy and established supply chains to reinforce its position as a regional production hub. Indonesia was the world’s largest nickel producer in 2024 and is using this advantage, alongside downstream policies and investment incentives, to build a domestic battery and EV industry. Vietnam has combined policy support, domestic manufacturing and charging expansion to accelerate BEV adoption.

Countries that align industrial strategy, manufacturing investment and infrastructure can accelerate near-term electrification while strengthening their long-term automotive competitiveness.

4. Competition is no longer defined by technology alone

Competition across Southeast Asia is no longer defined solely by ICE versus BEV. It reflects the different industrial strategies, production capabilities and supply chains of global manufacturers, shaped by their historical positions and existing strengths. Japanese manufacturers continue to build on decades of regional manufacturing expertise while gradually reducing the role of the internal-combustion engine within the powertrain. Chinese manufacturers are introducing portfolios centred more heavily on electrified vehicles, supported by vertically integrated supply chains and competitive pricing.

Southeast Asia is a diverse automotive region, with markedly different national powertrain, manufacturing and policy pathways, giving consumers a broader range of electrified technologies than at any point in the region’s history.

5. The transition needs to be measured differently

BEV market share remains an important indicator, but it does not fully capture how Southeast Asia is electrifying. The Engine Transition Framework provides a complementary measure by distinguishing between vehicles that retain a combustion engine and those that eliminate it.

This distinction matters because electrification and engine elimination are not progressing at the same speed.

Southeast Asia’s near- and medium-term automotive transition is unlikely to be defined by a single winning powertrain.

Methodology

This report combines proprietary market analysis with publicly available government, industry and academic research to examine the evolution of vehicle electrification across Southeast Asia.

The analysis focuses on five of the region’s largest automotive markets: Thailand, Vietnam, Indonesia, Malaysia and the Philippines. It compares the adoption of internal-combustion-engine vehicles (ICE), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), range-extended electric vehicles (REEVs) and battery electric vehicles (BEVs).

To complement conventional measures of BEV adoption, the report introduces the TMS Engine Transition Framework, which groups vehicles into two categories:

Engine-equipped: Vehicles that retain a combustion engine, including ICE, HEV, PHEV and REEV vehicles.

Engine-free: Battery electric vehicles that contain no combustion engine.

Within this framework, engine-free share is the percentage of total new-vehicle sales accounted for by BEVs. Engine-equipped share is the percentage accounted for by ICE, HEV, PHEV and REEV vehicles. For the mutually exclusive categories used in this report, engine-equipped share equals 100% minus engine-free share.

This approach does not introduce a new measure of BEV adoption. Instead, it provides a complementary interpretation of the market by making explicit the proportion of new vehicles that retain a combustion engine and the proportion that have eliminated it.

Data sources and comparability

The analysis uses the most complete full-year 2025 market data available for each country, drawing on government registrations, industry-association reporting and manufacturer disclosures. National reporting systems differ, and the underlying measures may include registrations, wholesale sales, retail sales or manufacturer-reported deliveries. These measures are not fully equivalent. Cross-market comparisons should therefore be interpreted as estimates of market composition based on the best available country-level evidence rather than as a completely harmonised statistical series.

Vehicles are classified according to their reported powertrain architecture. Non-plug-in hybrids are classified as HEVs, externally chargeable hybrids as PHEVs, range-extended architectures as REEVs and vehicles containing no combustion engine as BEVs. The treatment of mild hybrids and other market-specific classifications follows the underlying national source where model-level reclassification is not possible.

Fleet, rental, taxi, corporate and other non-private transactions are included where they form part of the relevant national reporting series. Related-party or manufacturer-affiliated registrations are not separately excluded unless they can be identified consistently.

Indonesia and Vietnam figures are preliminary and have been reconciled using available government, industry and manufacturer data. They may be revised if final verified market data materially differ.

Market shares are calculated using unrounded volumes and rounded independently to one decimal place. Totals may therefore differ slightly from 100%.

The report also draws on published research, policy documents and industry analysis to examine the structural factors influencing electrification, including consumer economics, charging infrastructure, manufacturing capability, industrial policy and manufacturer strategy.

Unless otherwise stated, market-share figures refer to calendar-year 2025. First-half 2026 data are used only to illustrate emerging developments and are identified as H1 2026 in the text.

References

Market Data

• TMS Market Intelligence (2025–2026)

• National automotive industry associations

• Ministry of Transport and vehicle registration authorities

Government & Policy

• Thailand Board of Investment (BOI)

• Indonesia Ministry of Industry

• Malaysia Ministry of Investment, Trade and Industry (MITI)

• Philippines Department of Energy (DOE)

• Vietnam Ministry of Industry and Trade

• U.S. Geological Survey. Indonesia: Statistics and Information on the Mining Industry. National Minerals Information Center. The source identifies Indonesia as the world’s first-ranked producer of mined nickel in 2024, representing an estimated 62% of global production.

• Ministry of Energy and Mineral Resources, Republic of Indonesia. Indonesia Bangun Industri Baterai Listrik Terintegrasi, Ini Rincian Proyeknya. 30 June 2025. Details the consortium, project components and investment of nearly US$6 billion.

International Organisations

• International Energy Agency (IEA)

• ASEAN Centre for Energy (ACE)

• Economic Research Institute for ASEAN and East Asia (ERIA)

Academic Research

• Lin et al. (2025). Barriers to Electric Vehicle Adoption in ASEAN Emerging Economies: Comparative Analysis of Cambodia, Myanmar and the Philippines. Discover Sustainability.

• Key Drivers of EV Market Growth: Insights from ASEAN Countries. Chulalongkorn University.

• Delina & Shi. Sustainable Mobility Transitions in Developing States.

• Li & Guan. Distribution of the ASEAN Battery Electric Vehicle Production Network.

Industry Research

• S&P Global Mobility

• BloombergNEF (BNEF)

• Fitch Solutions (BMI Research)

• IFRI. China’s EV Rise and the Strategic Challenge for Japan’s Automotive Industry (2026).

• East Asia Forum. Chinese Investment and Economic Security in Southeast Asia (2026).

• Deloitte, 2026 Global Automotive Consumer Study: Southeast Asia Perspectives. The study surveyed consumers across six Southeast Asian markets, including the Philippines.

About the Engine Transition Framework

The TMS Engine Transition Framework is a proprietary analytical framework developed by TMS to measure the transition from Engine Equipped to Engine Free passenger vehicles. The framework complements traditional electrification metrics by recognising that hybrid, plug-in hybrid and range-extended electric vehicles contribute to electrification while continuing to retain an internal combustion engine. The ETI is intended as an analytical tool to support market comparison and strategic discussion rather than as a replacement for conventional powertrain market share statistics.

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Silver is a small input with an outsized role

Silver receives far less attention than lithium, nickel or copper in discussions about the electric-vehicle supply chain, largely because it is used in much smaller quantities by weight, but has become much more important with the prevalence of electrified and connected vehicles, where it is used in relays, inverters, charging systems, sensors, battery-management electronics and other high-performance electrical components where conductivity and reliability are particularly important.

As vehicles become more electronically complex, the number of systems requiring these components continues to increase, which means battery-electric vehicles generally use more silver than comparable internal-combustion vehicles. Automotive demand is also developing alongside much larger sources of industrial consumption, including solar manufacturing, electronics and power infrastructure, creating greater competition for a material whose mine production has expanded relatively slowly and where new supply can take considerable time to develop.

For automakers, the significance is not whether there is enough silver to determine the future of electric mobility, but whether sustained industrial demand, constrained supply growth and greater price volatility turn a relatively small material input into a more meaningful procurement and cost consideration. If pressure on supply increased, then manufacturers would be incentivized to reduce silver volume through redesigning components and recovering more material through recycling.

These pressures are particularly relevant in Southeast Asia, where manufacturers compete across highly price-sensitive vehicle segments and relatively modest changes in production costs can influence vehicle pricing, financing and, ultimately, the pace at which electric vehicles become affordable to mass-market consumers.

Technology is reshaping the silver market

For much of its early history, silver was associated with jewellery, coins, bars, and its monetary role, although industrial demand has actually exceeded these individual uses for decades. More recently the composition and scale of industrial demand have changed, as older applications have declined and newer technologies expanded. A clear example is the decline of photographic demand, falling from 160.3 Moz in 2005 to 45.6 Moz in 2014, while photovoltaic demand increased from 7.3 Moz to 59.9 Moz over the same period.

Since 2015, there has been a 49% increase in industrial demand, driven by photovoltaics at nearly three-fiths of the increase, alongside vehicle electrification, power grid investment and more recently AI and data infrastructure. In 2025, global silver demand totaled approximately 1.13 billion ounces, of which industrial applications accounted for 657.4 million ounces, roughly 58% of the total, making industrial use the largest component of silver demand.

Industrial and investment demand behave differently and this was particularly evident in 2025. Since the pandemic there has been four consecutive years of growth, until 2025 when industrial silver demand declined by 3% to 657.4 Moz, mainly due to weaker voltaic demand and continuous silver thrifting. On the other hand coins and net bars moved in the other direction, increasing by 14% as investor interest strengthened in multiple markets.

The different factors influencing each side of the market help explain the divergence, with industrial consumption tied closely to production volumes, technology design, component requirements and the broader economic cycle, whereas investment demand can change quickly, with movements in price, interest rates, currencies and geopolitical uncertainty. The contrast in silver demand in 2025 is a good example of its industrial and precious metal role.

For mobility, automotive silver demand remains smaller than solar and the broader electronics sector, but it’s strategic importance is growing as vehicles incorporate more power electronics, sensors, switching systems, connectivity, and charging capability. The continued expansion of BEVs, PHEVs and HEVs, and charging networks, adds another source for continued industrial demand for silver.

Oxford Economics forecasts automotive silver demand to grow at a 3.4% compound annual rate between 2025 and 2031, with EVs expected to overtake internal-combustion vehicles as the largest source of automotive silver demand by 2027.

Higher silver prices are already encouraging greater recycling, material efficiency and substitution, meaning both supply and consumption can adjust over time and the future scale of the deficit is not fixed.

Supply responds slowly, while the size of the gap remains uncertain

Silver is expected to remain in a deficit in 2026, but the scale of the shortfall is relatively modest compared to expected market demand. The World Silver Survey 2026 forecasts total demand of approximately 1.11 billion ounces against supply of around 1.07 billion ounces, producing a deficit of 46.3 million ounces. This represents roughly 4% of annual demand and extends the market’s deficit into a sixth consecutive year.

The slow supply response, is in part due to the structural nature of how silver is mined, with only 26% mined coming from silver mines. The rest of silver production is mainly from the by-product of mining gold, zinc and copper. This makes silver supply dependent on investment decisions and operating conditions in other metals markets, limiting how quickly higher silver prices can translate into additional mine production. Recycling of silver increased by 2% in 2025 and is forecast to grow by 7% in 2026, but refining and ability to find new scrap inventory is an on-going constraint.

The cumulative imbalance between 2021 and 2026 has resulted in an overall shortfall of 762.1 Moz, equivalent to nearly 1 year of global mining production. Above-ground inventories have helped manage these deficits, but the progressive drawdown has reduced the availability of silver in certain markets, causing elevated pricing and procurement pressure. This does not mean the world is running out of silver, but continued deficits can make the market more sensitive when inventories become strained or unavailable. With increasing silver prices encouraging recycling, material efficiency and investment interest, both sides of the silver market are enabling the constant change in supply and demand, meaning the future of Silver deficit is not fixed.

Persistent deficits can tighten liquidity, raise premiums and increase procurement volatility.

Electrification increases silver intensity

Electrification raises silver intensity as vehicles incorporate more power electronics, electrical controls and high-voltage systems. Oxford Economics estimates that battery-electric vehicles use, on average, 67–79% more silver than comparable internal-combustion vehicles, with approximately 25–50 grams in a mainstream BEVs, compared with earlier research estimates of 15–28 grams for an ICE vehicle and 18–34 grams for a hybrid.

These ranges should be treated as directional benchmarks, rather than fixed requirements as silver content varies depending. on vehicle size, trim level, voltage architecture, electronic complexity and component design. A highly equipped ICE vehicle may therefore contain more silver than a basic hybrid, while a larger or more technologically advanced BEV may sit near the upper end of the published range.

Electrified vehicles currently use lithium-ion batteries, where most of the silver is used in the electrical systems and battery management, rather than directly in the cells themselves. Higher silver use reflects in the growing electrical complexity of the vehicle, charging infrastructure and driver assisted systems.

Next-generation battery architectures could change this relationship more substantially if silver begins to be incorporated directly into the battery cell.

Solid-state batteries could change the scale of demand

The key difference between lithium-ion and selected solid-state batteries is that silver is directly used in the cells of solid-state batteries, potentially increasing silver use substantially. Samsung-linked researchers have demonstrated an anode-free solid-state battery using a thin silver-carbon layer to help control how lithium is deposited during charging.

Samsung SDI is now developing its SolidStack all-solid-state platform. Samsung is targeting mass production in the second half of 2027. Samsung has not disclosed the silver content of a commercial cell or vehicle battery pack, making it difficult to estimate future demand from research-stage designs, manufacturers are also likely to reduce coating thickness, silver concentrations and overall material requirements as the technology develops.

The higher silver amounts considered in this article should be treated as technology scenarios rather than a forecast. A silver-carbon architecture using several hundred grams, and potentially close to 1 Kg per 100 kWh pack, would produce a significant increase from the tens of grams used in mainstream BEVs today, which could add a material cost to EVs, if silver prices remain elevated.

Today’s mainstream BEVs remain a tens-of-grams application for silver, while selected solid-state architectures could move that exposure into the hundreds of grams. The eventual commercial loading, however, remains uncertain.

What higher silver prices mean for vehicle economics

The impact of silver prices depends on how much silver is used in each vehicle architecture and how those costs move through the component supply chain. For a mainstream BEV, containing 25–50 grams of raw silver would be worth approximately US$48–$96 at US$60 per ounce, US$96–$193 at US$120 and US$161–$322 at US$200. With silver having traded above US$121 per ounce in January 2026, the US$120 scenario is no longer purely theoretical, while US$200 provides a more aggressive case for examining the impact of a substantially tighter market.

Even at US$200 per ounce, the raw silver contained in a mainstream BEV would represent only around 0.8–1.6% of a US$20,000 vehicle, and silver likely becomes an additional source of cost pressure, with raw exposure of roughly $100-$300 per vehicle under elevated pricing scenario’s becoming more significant when combined with increased costs for copper, batteries, semiconductors, logistics and compliance. Entry level segments will be most affected, where there is less margin to absorb additional costs, which is felt by the consumer, especially in price-sensitive countries like the Philippines.

Solid-state batteries create a different cost scenario

The economics could look very different if selected solid-state battery designs bring silver directly into the cell at loadings measured in hundreds of grams rather than tens. Because no manufacturer has disclosed a verified commercial silver requirement, the 500-gram and one-kilogram assumptions used here should be treated as technology scenarios, rather than Samsung, BYD or industry-standard bills of materials.

At those levels, silver would move from being a relatively small component cost to a more meaningful part of battery economics, giving manufacturers a strong incentive to reduce coating thickness and silver concentrations, improve cell efficiency, recover production scrap and develop alternative materials or interface designs. It also suggests that early high-silver solid-state vehicles would be more likely to appear first in premium segments, where higher material costs can be absorbed more easily, before reaching mass-market models.

Currently, silver remains a relatively modest cost, but in some solid-state designs, a much higher silver use will have a more meaningful impact on battery and vehicle pricing.

Why this matters for Southeast Asia

Southeast Asia is becoming one of the world’s fastest-growing electric-vehicle markets, with over half a million units in 2025 and accounting for close to one-fifth of new-car sales. Vietnam, Indonesia and Thailand led much of that growth, supported by policy incentives, expanding local production and a wider range of more affordable models.

Affordability remains one of the biggest factors shaping EV adoption across Southeast Asia, with prices in Thailand broadly reaching parity with comparable internal-combustion vehicles and the average BEV premium in Indonesia falling from more than 50% in 2024 to around 40% in 2025. Even so, price competitiveness still varies significantly by market and model, while entry-level buyers remain highly sensitive to monthly payments, financing costs and overall household budgets.

Silver is unlikely to determine mainstream EV affordability on its own, but it adds to a wider set of cost pressures across batteries, copper, semiconductors, logistics and financing, with exposure becoming more significant in selected solid-state platforms, which may require more silver. The challenge for manufacturers will be the ability to absorb, reduce silver concentration or localise costs, to keep reducing vehicle prices, particularly in mass-market segments in price sensitive countries.

This will most likely contribute to a more uneven electrified transition across the region, with mainstream lithium-ion BEVs becoming increasingly competitive as production scales and supply chains deepen, while volatile input costs and differences in local manufacturing capability delay price parity in some markets and keep hybrids relevant for longer. The longer-term outcome will depend less on the price of any single material than on whether manufacturers can reduce costs through localisation, scale, material efficiency and recovery, ultimately determining whether mass-market consumers can afford to buy, finance and own electric vehicles.

Silver is unlikely to stop Southeast Asia’s EV transition on it’s own, but it could influence how quickly affordable models reach the mass market and which technologies consumers adopt along the way.

References & Resources

Primary Silver Market & Automotive Research

The Silver Institute / Metals Focus — World Silver Survey 2026
Primary source for global silver supply and demand, industrial consumption, mine production, recycling, market deficits, above-ground inventory dynamics, and recent silver-market conditions.

Oxford Economics / The Silver Institute — Silver: The Next Generation Metal (2025)
Primary source for automotive silver-demand forecasts, the current 25–50 gram indicative mainstream BEV range, the estimate that BEVs use approximately 67–79% more silver than comparable ICE vehicles, and automotive silver-demand projections through 2031.

Metals Focus / The Silver Institute — Automotive Silver Research (2021)
Source for legacy indicative vehicle-content benchmarks of approximately 15–28 grams for ICE vehicles and 18–34 grams for hybrids. These are used as directional benchmarks rather than current 2026 averages.

Solid-State Battery & Next-Generation Technology Research

Nature Energy — Silver–Carbon Composite Anode Research (2020)
Peer-reviewed Samsung-linked research demonstrating an anode-free all-solid-state battery using a thin silver–carbon composite layer to regulate lithium deposition.

Nature Communications — Silver-Exsolution Solid-State Battery Research (2025)
Research demonstrating silver-doped solid electrolytes and nanoscale silver formation to improve lithium deposition in anode-free solid-state cells.

Nature Materials — Nanoscale Silver-Coating Research (2026)
Research showing how very thin silver-based treatments can improve the mechanical properties of ceramic solid electrolytes, illustrating that future silver requirements may vary substantially by architecture.

Samsung SDI — SolidStack / All-Solid-State Battery Development
Company disclosures covering Samsung SDI’s proprietary anode-free coating technology and its target for all-solid-state battery mass production in the second half of 2027. Samsung has not disclosed a verified commercial silver loading per cell or battery pack.

Electric Vehicles, Manufacturing & Southeast Asia

International Energy Agency — Global EV Outlook 2026
Primary source for global and Southeast Asian EV adoption, vehicle pricing, manufacturing capacity, imports, localisation trends, and regional electrification dynamics.

International Energy Agency — Manufacturing & Trade Analysis
Supporting source for Chinese automakers’ overseas manufacturing footprint, Thailand and Indonesia production capacity, plant utilisation, vehicle trade, and localisation trends.

ASEAN Centre for Energy
Regional energy-transition, electrification, charging-infrastructure and ASEAN policy research.

Asian Development Bank
Southeast Asian infrastructure, industrial development, transport and economic research.

Department of Energy Philippines
Philippine electric-vehicle, charging-infrastructure and energy-transition policy information.

Board of Investments Philippines
Philippine automotive manufacturing, EV investment incentives and industrial-development programmes.

Broader Energy, Technology & Industrial Research

These sources provide useful contextual research but are not the principal basis for the quantitative silver estimates in this article:

International Renewable Energy Agency (IRENA) — Renewable-energy deployment, solar capacity and energy-transition research.

BloombergNEF — EV, battery, renewable-energy and electrification market research.

Semiconductor Industry Association — Semiconductor demand, manufacturing and industry trends.

McKinsey & Company — Automotive manufacturing, batteries, supply chains and semiconductor research.

Deloitte Insights — Automotive, technology and semiconductor industry analysis.

World Economic Forum — Industrial supply chains, critical materials and energy-transition research.

Silver Prices & Market Commentary

World Silver Survey 2026 / Metals Focus
Primary reference for recent silver-market conditions, including the January 29, 2026 record above US$121 per ounce, liquidity conditions, premiums and lease rates.

CME Group — Precious-metals futures, inventories and derivatives-market data.

TradingView — Historical silver-price charting and market visualisation.

Kitco Metals — Precious-metals pricing and market commentary.

Michael Oliver / Momentum Structural Analysis — Technical and macro commentary on precious metals. Used as market perspective rather than as the basis for the article’s fundamental forecasts.

I would put GoldSilver, Investing.com, MiningVisuals and Newsbase in a separate category if we want to retain them at all:

Additional Market Commentary Reviewed

These sources were reviewed when assessing potential silver requirements in future solid-state batteries. Their estimates—particularly claims of approximately one kilogram of silver per 100 kWh pack—should not be interpreted as manufacturer specifications.

• GoldSilver

• Investing.com

• MiningVisuals

• Newsbase

That distinction is important because our final analysis does not accept the one-kilogram figure as a Samsung or BYD specification.

Notes & Assumptions

Silver market data. Historical market figures and the 2025–2026 outlook are based principally on the World Silver Survey 2026. Longer-term outcomes remain uncertain because higher prices can affect recycling, substitution, thrifting, investment demand and industrial consumption.

Vehicle silver content. Silver-content estimates vary according to vehicle size, electrical architecture, electronics content, voltage systems, component design and supplier choices. The 25–50 gram mainstream BEV range was reaffirmed by Oxford Economics in 2025, while the ICE and hybrid ranges used in the analysis are older industry benchmarks and should be treated as indicative.

Solid-state battery scenarios. There is currently no verified industry-standard silver loading for a commercial solid-state EV battery. The illustrative 500 gram and one kilogram per 100 kWh pack scenarios used in this article are technology sensitivities designed to explore the economics of potentially silver-intensive architectures. They are not Samsung, BYD or industry-standard bills of materials.

Silver-price scenarios. US$60, US$120 and US$200 per ounce are scenario assumptions rather than price forecasts. US$120 represents an observed high-price reference following silver’s January 2026 record above US$121, while US$200 is used as a stress scenario to test potential vehicle-cost exposure.

Vehicle-cost analysis. Calculations represent the approximate raw value of silver contained in a vehicle or battery architecture. They do not represent the final manufacturing or retail-price impact, which depends on supplier contracts, fabrication costs, hedging, inventories, margins, taxes, logistics, financing and component redesign.

Southeast Asia analysis. Regional conclusions combine published EV-market and manufacturing data with scenario analysis. Outcomes relating to future localisation, hybrid demand, solid-state adoption and consumer affordability should be interpreted as analytical implications rather than forecasts.

Charts and models. Visualisations combine published industry data with clearly identified analytical assumptions. Figures have been rounded where appropriate and may not sum precisely because of rounding.

This hierarchy gives the article a much stronger research footing: Silver Institute/Metals Focus + Oxford Economics for the silver and automotive thesis; peer-reviewed research + Samsung SDI for solid-state technology; and the IEA for the Southeast Asian mobility thesis.

Understanding Southeast Asia Through Mobility

Southeast Asia is entering a new phase of economic and industrial development.

Automotive markets are being reshaped by electrification and the rapid expansion of Chinese manufacturers. Artificial intelligence is beginning to change how businesses operate and compete. Semiconductor capacity has become strategically important. Digital marketplaces are changing distribution. Banks, lenders and insurers are adapting to new technologies and new forms of risk. Infrastructure investment and logistics networks are evolving alongside shifting trade and supply chains.

These changes are usually analysed separately.

They should not be.

The forces reshaping automotive markets are increasingly the same forces reshaping Southeast Asian economies: technology, capital, infrastructure, energy, industrial policy and changing consumer behaviour.

Mobility sits at the intersection of all of them.

That makes it more than a sector to analyse. It makes it a useful lens for understanding how the region itself is changing.

Southeast Asia Needs Its Own Lens

Much of the global conversation around technology, mobility and industrial development is still framed through the experience of China, the United States or Europe.

Those markets matter. But their assumptions do not always travel well.

Southeast Asia has its own market structures, infrastructure constraints, regulatory environments, financing gaps and patterns of consumer behaviour. Digital adoption is high, but economic development remains uneven. Automotive markets range from highly mature to deeply fragmented. Access to credit varies considerably. Insurance penetration, dealer structures, logistics networks and charging infrastructure differ from one market to the next.

Even where the same technologies are arriving, the conditions under which they are adopted can be very different.

Electric vehicles are one example.

Their trajectory will depend not only on vehicle prices and model availability, but on financing, charging infrastructure, electricity systems, taxation, industrial policy, battery supply chains, consumer confidence and residual values.

The same applies elsewhere.

AI adoption depends on software capability, data availability and the economics of implementation. Digital marketplaces depend on distribution structures and customer acquisition economics. Automotive lending depends on credit quality, affordability and asset values. Insurance reflects both the underlying risks of new technologies and the ability of markets to price them.

Technology may be global.

Adoption remains local.

Understanding Southeast Asia therefore requires more than applying global narratives to regional markets. It requires understanding the structures beneath them.

The Mobility Economy

This is the territory The Mobility Signal is designed to explore.

Our starting point is automotive and mobility, but our field of view is deliberately wider. A vehicle sits within a much larger economic system. It must be manufactured, distributed, marketed, financed, insured, serviced, powered and ultimately resold. Increasingly, it is also connected to software platforms, artificial intelligence, semiconductor supply chains, digital marketplaces and financial infrastructure.

Each part of that system has its own economics, data and competitive dynamics, but none operates independently. Changes in semiconductor technology affect vehicle capabilities and manufacturing costs. Electrification alters supply chains, infrastructure requirements and energy demand. Financing determines affordability and therefore adoption. Insurance influences the economics of ownership. Online marketplaces affect discovery, pricing and distribution, while logistics infrastructure determines how efficiently vehicles and components move across the region.

This is why we increasingly think in terms of the mobility economy, rather than the automotive industry alone. The most consequential changes often occur not within individual sectors, but at the points where they intersect.

That feels much more like TMS.

Then The Forces We Watch is exactly where proper bullets belong:

The Forces We Watch

The Mobility Signal follows the systems that are changing how Southeast Asian mobility markets operate. Our focus is not simply on whether a sector is growing, but on how structural changes alter competition, economics and market accessibility.

We are particularly interested in:

• Automotive demand and market structure — vehicle sales, brand competition, distribution, pricing, used vehicles and changing consumer behaviour.

• Electrification — EV and hybrid adoption, charging infrastructure, battery economics, energy systems and the competitive expansion of Chinese manufacturers.

• Finance and credit — banks, automotive lending, leasing, affordability, interest rates, credit quality and the role financing plays in determining adoption.

• Insurance and risk — motor insurance, claims economics, pricing, repair costs, new technology risks and the digitisation of insurance distribution.

• Digital marketplaces and distribution — how consumers discover, compare, finance and purchase vehicles, and how software changes the economics of customer acquisition and distribution.

• AI, software and semiconductors — the technologies increasingly shaping vehicles, manufacturing, underwriting, customer engagement and business productivity.

• Logistics and infrastructure — ports, roads, warehousing, charging networks and the physical systems that enable regional commerce and mobility.

• Industrial strategy and supply chains — manufacturing investment, critical minerals, batteries, trade flows, localisation and the changing geography of production.

• Capital, policy and macroeconomics — regulation, industrial incentives, demographics, capital flows and the economic conditions that ultimately determine demand.

That list would also tie very naturally to the new master TMS visual we just created.

I would then add a second, shorter list that is even more important because it defines how TMS thinks, not merely what TMS covers:

What We Are Trying to Understand

Across these areas, we return to a common set of questions:

• What is actually changing beneath the headline numbers?

• Which changes are structural, and which are temporary?

• Where is technology improving economics rather than simply attracting attention?

• What determines whether a market is genuinely accessible to new entrants?

• Where are financing, infrastructure or regulation constraining adoption?

• How are competitive advantages shifting between incumbents and new entrants?

• Which developments in one sector are likely to create consequences elsewhere?

• What does the available data suggest about where the market is heading next?

That section, to me, is very TMS. It makes clear that this isn’t a content publication organised around categories. It is an analytical capability built around questions.

I’d also expand Beyond Headlines and Forecasts into two or three fuller paragraphs. There is an important distinction there that deserves more room:

Southeast Asia does not suffer from a lack of information. The region produces a constant stream of sales data, company announcements, investment commitments, regulatory changes, product launches and forecasts. The challenge is determining what those individual developments mean when placed in the context of how markets actually operate.

A new EV factory, for example, may signal industrial ambition, but its significance depends on local demand, utilisation, supply-chain depth, export economics and government support. Rising automotive loan volumes may indicate healthy demand, or they may conceal deteriorating affordability and greater credit risk. A new digital platform may appear disruptive while still struggling to overcome entrenched distribution economics.

This is where analysis becomes more valuable than aggregation. The objective is not simply to collect more information, but to connect market data with operating realities and understand the relationships between them.

That is probably the direction I would take throughout.

I’d also slightly reconsider the end. Rather than finishing with several short declarations, I’d make the final section one substantial closing argument followed by a single strong final sentence. Something like:

What The Mobility Signal Is For

The Mobility Signal is intended for people making decisions within these markets: operators deciding where to invest, automakers assessing competitive change, banks and insurers evaluating risk, investors distinguishing structural opportunity from short-term enthusiasm, technology companies identifying where digital infrastructure can create value, and policymakers considering how industrial and technological change affects economic competitiveness.

We do not expect every market to develop in the same way, nor do we believe every new technology will produce the outcomes its advocates predict. Southeast Asia is too diverse for simple regional narratives. The purpose of our work is therefore to understand the differences between markets, identify the forces that matter most within each one, and connect developments that are too often analysed in isolation.

Our ambition is not to predict every turn. It is to build a clearer picture of how Southeast Asia’s mobility economy is changing, what is driving that change, and what it means for the businesses and institutions operating within it.

The signal is rarely one headline. It is the pattern that emerges when the pieces are connected.