Why Indian EV players are charging into the SEA opportunity

*This article is adapted from * TechinAsia

Crouching tiger, hidden dragon? For Southeast Asia’s electric vehicle market, which is set to be the world’s next blockbuster, that’s all in the past.

EV players from India – whose national animal is the Bengal tiger – have set their sights on the region, with the likes of charging platform Kazam, electric scooter provider Zypp, and EV charger manufacturer Exicom all eyeing a slice of the pie.

This comes as EV manufacturers from China, a country where the dragon is an important cultural symbol, have quickly gained market share in Southeast Asia, long a stronghold for established Japanese carmakers like Toyota and Honda.

Earlier this month, Grab announced a partnership with BYD to expand its EV fleet with up to 50,000 of the latter’s vehicles across the region.

While they have a huge domestic market, some Indian EV firms are keen to enter Southeast Asia despite the prospect of fierce competition from both local and Chinese players. And with Southeast Asian EV manufacturers like VinFast entering the Indian market, it’s logical for India-based companies to go on the offensive as well.

Why Southeast Asia matters

The data is undeniable. By 2035, Southeast Asia’s EV market could generate between US$80 billion and US$100 billion of revenue each year, according to a report from consultancy EY-Parthenon. In 2021, that figure stood at only US$2 billion.

Sales in the region are expected to grow across all major EV segments – passenger vehicles, commercial vehicles, and two-wheelers.

Adoption is also low. In Indonesia, the world’s largest two-wheeler market after China and India, the penetration rate for two-wheeler EVs stood at just 0.7% in 2023, compared to China’s 90% as of 2022 and India’s 7% as of the first half of 2024.

Southeast Asia’s EV industry is also supported by government policies. Thailand has introduced robust incentives, including import duty cuts of up to 40% on EVs priced under 2 million baht (US$59,000), excise tax reductions from 8% to 2% for EVs under 7 million baht (US$206,000), and consumer subsidies of up to 100,000 baht (US$2,900) per buyer.

Meanwhile, the Indonesian government is offering a value-added tax reduction from 11% to 1% for electric cars with over 40% locally produced components. This threshold will rise to 60% by 2027.

Kazam is focused on building EV charging infrastructure in the emerging markets of Southeast Asia and Middle East. Founder Akshay Shekhar believes that it is “very important to enter Southeast Asia immediately” because the region’s current market is where India was three to four years ago, when consumers and businesses were first contemplating switching to EVs.

Getting a foothold in the market at this stage would provide a first-mover advantage for businesses looking to create a long-term relationship with potential customers.

Meanwhile, Exicom has also entered Thailand with the installation of six 30-kilowatt chargers.

However, not all Indian players see the same urgency to enter the region. Madhumita Agrawal, founder and CEO of e-bike manufacturer Oben Electric, tells Tech in Asia that her company’s “immediate goal” is to secure a strong position in India’s two-wheeler market, although it “may explore international markets in the future.”

Learning curve

Southeast Asia may present significant opportunities, but entering the region will require Indian EV players to adapt to local market conditions.

For instance, consumers in Southeast Asia prefer maxi scooters, which offer larger and more comfortable designs, compared to the smaller, functional zip scooters that are popular in India, Agrawal tells Tech in Asia.

Roshan Raj, partner at consultancy Redseer, says that localizing the form and features of an EV will be a “key part of the puzzle” for new players in the region, noting that this is where China-imported vehicles “have lagged in terms of achieving product-market fit.”

This might explain why a legacy Indian company like Bajaj Auto, despite announcing plans to expand into Southeast Asia in 2022, has yet to make significant moves in the region.

However, Vikash Mishra, founder and CEO of MoEVing – an Indian company providing EV rentals to businesses – offers a different perspective.

According to him, companies like Bajaj, which launched its first EV in 2020, are likely focusing on refining their product strategy in India by studying battery performance over its full lifecycle – which lasts up to five years – before expanding to new markets.

Indian EV startups with successful models in their home country could translate their operational expertise into new markets, according to Vasudha Madhavan, founder and CEO of investment banking firm Ostara Advisors.

However, she warns of a “learning curve” for companies entering Southeast Asia, “specifically in operations-intensive logistics or last-mile mobility solutions.”

Madhavan says that by 2040, the region will need additional investment of over US$3 billion for 11.5 million EV chargers as well as for more skilled technicians.

In addition, as the region’s EV sector is still in its infancy, many Indian startups face challenges in understanding and adhering to appropriate regulations.

For example, Kazam has had to adjust to regulations in various Southeast Asian countries due to its EV charging stations. These consume significant amounts of power, typically five to 10 houses worth of electricity in one charging cycle.

This meant that the company was required to register with electricity authorities, which involved sharing data in the required format, and setting up API integrations for seamless information flow. Shekhar describes the process as “painstaking.”

To simplify this, the founder tells Tech in Asia that Kazam is exploring partnerships with local clients.

Two-wheeler, too good

Indeed, local partnerships will be critical to navigate operational as well as regulatory issues in Southeast Asia.

Shekhar says that Kazam recognizes the need for collaboration in new markets, rather than trying to take up the entire piece in one go.

The company has already partnered with Petroliam Nasional (commonly called Petronas) in Malaysia, helping one of the latter’s subsidiaries get into the EV leasing and charging business.

Kazam is also in talks with a ride-hailing company in Indonesia for a possible deal, says Shekhar.

While Grab has already teamed up with BYD for its four-wheeler EV fleet, the two-wheeler segment presents opportunities for new partnerships.

Zypp has had discussions with Grab and Gojek to provide fleets for last-mile deliveries and other similar services in the two-wheeler space, says co-founder and CEO Akash Gupta. He adds that the company plans to enter Indonesia and Thailand “with the right partner” by the end of the year.

While Indian players may face fierce competition, Southeast Asia’s EV sector looks to be vast enough to have room for everyone. “Local players are just starting off, while competition from China is something to keep a watch on but not worry about,” says Redseer’s Roshan.

About Kazam:

Founded with a mission to power India’s EV revolution, Kazam is building the country’s largest smart and affordable EV charging network. Its agnostic EV charging software platform connects fleets, Charge Point Operators (CPOs), RWAs, OEMs, and energy distributors, enabling seamless charging experiences.

With 7,000+ devices already on its platform, Kazam is driving the future of EV infrastructure by integrating cutting-edge software and hardware solutions. Some of the biggest names in the industry rely on Kazam to accelerate the transition to clean mobility, reducing emissions and making EV adoption more accessible than ever.

For the latest news on Vertex Ventures SE Asia and India and our portfolio companies, follow us on Linkedin or subscribe to our monthly newsletter.