The implementation of policies promoting the transition from oil to electric power is fueling a surge in demand for electric two-wheelers in the Southeast Asian market.

Since 2019, Southeast Asian countries, including Indonesia, Thailand, and Vietnam, have introduced relevant policies to restrict the use of conventional fuel-powered motorcycles in response to carbon emissions and environmental pollution. As of 2023, these countries have successively implemented subsidies for the purchase of electric two-wheelers, accelerating the process of transitioning from oil to electric power. As a result, the demand for electric two-wheelers in the Southeast Asian market continues to increase, with fuel-powered motorcycles gradually being replaced by electric scooters, e-bikes, electric motorcycles, and other electric two-wheeler products. Southeast Asia has also become another important growth market in the field of electric two-wheelers.

The demand for two-wheelers in the Southeast Asian market is high.

Southeast Asia is the third-largest two-wheeler market globally. According to relevant data, the motorcycle market in the ten ASEAN countries reached a scale of 10.6 million units in 2022, ranking third globally. In the first six months of this year, motorcycle sales in Southeast Asia reached 7.5 million units, making it one of the fastest-growing regions worldwide. As of 2022, the total number of motorcycles in Southeast Asia has reached 200 million units, with Indonesia having a stock of 70 million units, Vietnam over 45 million units, and Thailand over 30 million units.

Fuel prices are continuously rising. The energy crisis resulting from the Russia-Ukraine war has led to a 33%-45% increase in gasoline prices in Southeast Asia in Q1 2023 compared to Q1 2021. The increased cost of using traditional fuel-powered motorcycles has prompted more and more consumers to consider switching to electric two-wheelers. Southeast Asian governments are also eager to reduce their dependence on imported fuel by promoting the adoption of electric vehicles.

The "oil-to-electricity" policy is being implemented. Starting in 2023, Southeast Asian countries have successively introduced subsidies for the purchase of electric two-wheelers. The Philippines has proposed tariff exemptions for electric motorcycles, electric two-wheelers, and their components for the next five years. Indonesia and Thailand have also decided to provide subsidies equivalent to over 3,000 yuan for each electric motorcycle.

The Southeast Asian region is characterized by its mountainous terrain, inadequate public transportation infrastructure, and relatively short distances for urban travel, typically ranging from 10 to 20 kilometers. As a result, motorcycles have become the primary mode of transportation for many people. In surveys on motorcycle ownership rates in major Asian countries, Southeast Asian countries such as Thailand, Vietnam, and Indonesia rank far ahead. The combination of high fuel prices and policy incentives will unleash a significant demand for the replacement of fuel-powered motorcycles, making the Southeast Asian market a potential growth point for the electric two-wheeler industry.

The electric vehicle penetration rate in the Southeast Asian market is currently low, indicating significant room for market development.

As of 2022, electric motorcycles accounted for less than 1% of the Southeast Asian market. However, there is enormous growth potential in the future. Vietnam has seen an earlier start in the electric motorcycle market, with a penetration rate exceeding 10%. In contrast, other countries in the region have penetration rates of less than 5%.

Under the implementation of the "oil-to-electricity" policy, the electric two-wheeler market in Southeast Asia is in its early stages and entering a phase of rapid growth. In addition, the introduction of policies to promote the adoption of electric two-wheelers has attracted the participation of many companies.

Opening the market through B2B collaborations

In addition to daily commuting needs, Southeast Asia is experiencing rapid growth in delivery services, such as food delivery, courier services, and the sharing economy. Many companies have tapped into a broader market through B2B collaborations. For example, they collaborate with delivery platforms to introduce electric motorcycle rental models or directly sell to delivery platforms.

Ride-hailing platforms like Grab and Gojek have launched their own fleets of electric motorcycles. Grab has partnered with Indonesian electric motorcycle brand Viar Motor and battery swapping brand SWAP. SWAP's electric motorcycle, SMOOT Tempur, was introduced to meet the electric motorcycle needs of Grab's fleet. Gojek has announced plans to fully electrify all cars and motorcycles on its platform by 2030. They have established partnerships with Indonesian electric motorcycle company Gesits, Taiwanese electric scooter brand Gogoro, and Vietnamese electric vehicle company Selex to provide drivers with electric motorcycles and electric cars.

The B2B demand for electric two-wheelers in Southeast Asia not only presents opportunities for brand development but also greatly promotes the adoption and usage of electric two-wheelers throughout the region.

In summary, the electric two-wheeler market in Southeast Asia is still in its early stages, with a significant amount of market demand yet to be tapped. Currently, the motorcycle market in Southeast Asia is dominated by Japanese brands. However, there is still tremendous potential for domestic brands in the electric motorcycle sector. The electrification of two-wheelers in Southeast Asia is just beginning, and Chinese companies can leverage their mature supply chain systems and comprehensive support systems to capture a larger market share in the trend of "oil-to-electricity" in Southeast Asia.