Whalesbook
EV Boom Fueled by High Gas Prices
Southeast Asia's automotive market is seeing a dramatic rise in electric vehicle (EV) sales, directly linked to higher crude oil prices that have pushed gas prices past $100 a barrel. Consumers across the region are increasingly choosing EVs to cut fuel costs. Vietnam's leading EV maker, VinFast, reported a remarkable 127% year-over-year increase in domestic deliveries for March, reaching 27,609 units and contributing to 53,684 deliveries in the first quarter. Chinese EV giant BYD dominated booking charts at the Bangkok International Motor Show, securing 17,354 orders and outselling long-time market leader Toyota. This surge shows buyers are increasingly prioritizing fuel efficiency and overall cost. The ASEAN EV market is projected for strong growth, with an estimated annual increase of 31.55% between 2026 and 2031, reaching $23.58 billion by 2031.
VinFast Sees Sales Soar, But Profitability a Concern
VinFast is benefiting from strong demand in its home market of Vietnam. The company's March deliveries of 27,609 EVs represent significant acceleration, with its Limo Green model leading sales. Total first-quarter deliveries reached 53,684 units, indicating strong momentum. While VinFast achieved revenue growth, hitting $1.57 billion in Q4 2025 (up 139% year-over-year) and $3.5997 billion for full-year 2025 (up 105.4% year-over-year), profitability is a key challenge. The company posted a Q4 2025 net loss of $1.4 billion and a full-year 2025 net loss of $3.87 billion. Despite improvements in gross margin percentage, the absolute gross loss widened. With a negative P/E ratio and total debt of $4.69 billion, VinFast's financial health is under scrutiny, though analysts maintain a mixed to positive outlook with price targets suggesting potential upside.
BYD Eyes Global Growth Amidst China Price Wars
BYD is using its global production and export strategy to overcome challenges in its home market. The company has raised its 2026 export target to 1.5 million vehicles, a 15% increase from its previous goal, showing it relies more on international sales to offset slower demand and fierce price wars in China. BYD's profit per vehicle is much higher internationally (around 20,000 yuan) compared to China (around 5,000 yuan), where profit margins have narrowed to 17.74% in 2025. The success at the Bangkok Auto Show, where BYD secured the most bookings, highlights its growing popularity in Southeast Asia, a region where Chinese EV makers are rapidly gaining market share. While BYD's overall vehicle sales grew 7.73% in 2025, its net profit declined 19% to $4.72 billion, its first annual profit drop since 2021. The company's ADR trades with a P/E ratio of approximately 19.84, and analysts maintain a strong buy consensus with price targets indicating potential upside.
Key Challenges: Profitability and Competition Ahead
Despite the sales boom, significant challenges remain for both manufacturers and the broader EV sector in Southeast Asia. VinFast's substantial net losses and negative gross margins, even with improving percentages, show the difficulty of achieving lasting profits amid aggressive expansion. Reliance on funding from affiliated companies adds risk. For BYD, the intense domestic price war in China is eroding profits, driving it to rely more on overseas markets, which are also getting more competitive. The success of its ambitious export targets depends on navigating changing trade rules and sustained demand in diverse international markets. Sector-wide, while charging infrastructure is expanding, its pace may not always match EV adoption rates, potentially creating range anxiety and logistical hurdles. Furthermore, ongoing geopolitical tensions and the broader energy crisis introduce supply chain vulnerabilities and price volatility that could impact production costs and consumer confidence.
Outlook: Infrastructure and Market Growth Expected
Government initiatives across Southeast Asia are key to maintaining EV growth. Countries like Indonesia and Thailand are setting goals for charging station expansion, and policy support is growing to speed up the EV sector. Capital Economics reports a significant rise in global EV demand, with registrations increasing in markets like Japan, South Korea, India, and Australia. Analysts remain largely optimistic about both companies, with BYD holding a strong buy consensus and VinFast showing a mixed to positive rating, showing confidence in future growth. Long-term success for both will depend on turning sales into lasting profits and navigating a competitive global EV market. The energy crisis is a catalyst, but strategic execution and cost control will decide market leaders.