Pevita Pearce
The worldwide transition toward zero-emission transportation is gathering momentum, yet the pace at which automotive companies are adapting to this seismic shift varies dramatically. A recent webinar, jointly hosted by Greenpeace Japan and featuring experts from the International Council on Clean Transportation (ICCT) and Greenpeace East Asia, illuminated these critical differences, particularly highlighting the strategic trajectories of major automakers in the burgeoning electric vehicle (EV) market, with a keen focus on Southeast Asia.
The session, held on July 13th, brought together Dale Hall of the ICCT and Erin Eunseo Choi of Greenpeace East Asia to dissect how leading global car manufacturers are performing in their transition to battery-electric vehicles (BEVs). Their analysis underscored a growing divide between companies that are aggressively investing in and deploying EVs and those that appear hesitant, risking their future market share and global competitiveness.
Southeast Asia: A Crucial Frontier in the Electric Vehicle Revolution
Southeast Asia has emerged as a pivotal battleground for the future of mobility, with Indonesia playing a particularly significant role. As one of the region’s largest automotive markets and a nation actively positioning itself as an EV hub, Indonesia’s market dynamics offer a compelling case study. By 2025, the country witnessed a rapid expansion of its BEV market, securing its position as the third-largest in Southeast Asia, with sales exceeding 103,000 units by year-end. For legacy automakers, especially those from Japan, losing ground in this strategically vital region carries substantial long-term consequences, potentially impacting their global standing for decades to come.
Choi’s analysis presented a clear picture of how automakers from China, Japan, and South Korea are charting distinct paths, yielding markedly different outcomes in this dynamic market. Their varied strategies are not only shaping regional automotive landscapes but also influencing the global push towards decarbonization.
China’s Meteoric Rise in the EV Sector
Chinese automakers, spearheaded by industry giants BYD and Geely, have adopted an aggressive, forward-thinking strategy in expanding their electric vehicle sales. Despite a general contraction observed in Indonesia’s overall automotive market, Chinese brands achieved an astonishing year-on-year sales surge of 153%, effectively tripling their market share to a significant 10%. This remarkable growth underscores their rapid market penetration and increasing consumer acceptance.
BYD, in particular, has cemented its position as the standout leader in the EV segment, capturing over half of Indonesia’s BEV market share. The dominance of Chinese EV brands is further evidenced by their commanding presence in the first half of 2025, where they accounted for more than 90% of Indonesia’s total EV sales. This overwhelming success is attributed to a combination of competitive pricing, advanced battery technology, and a diverse range of models tailored to local market demands.
Japan’s Eroding Dominance and Strategic Hesitation
While Japanese brands have historically enjoyed a strong foothold and consumer loyalty in Southeast Asia, their long-standing dominance is now visibly eroding. In the first quarter of 2025, a significant number of Japanese manufacturers, with the notable exception of Toyota, experienced sales declines. This downturn occurred precisely as their Chinese competitors were rapidly expanding their market presence.
According to Choi, the core issue lies in strategic prioritization. Japanese manufacturers remain heavily reliant on internal combustion engine (ICE) and hybrid vehicle technologies. Their reluctance to fully commit to a clear and accelerated EV roadmap for the Southeast Asian market is a critical misstep. This delay not only impacts their competitive standing but also exacerbates regional climate inequities. Vehicles powered by combustion engines sold in Southeast Asia emit significantly higher levels of carbon dioxide equivalent per vehicle compared to those sold in markets with higher EV adoption rates, such as Europe. Consequently, climate-vulnerable communities in the region are disproportionately bearing the brunt of environmental pollution and climate change impacts.
South Korea’s Steep Decline and the Warning Signs
The trajectory of South Korean automakers, particularly Hyundai, serves as a stark warning to the industry. In the BEV segment, Hyundai’s sales in Indonesia plummeted by a staggering 75.9%, falling from 7,590 units in 2023 to just 1,828 units in 2025. This dramatic decline highlights the consequences of a bifurcated electrification strategy.
Hyundai has publicly articulated clear commitments to phasing out combustion engines in key markets like Europe and the United States. However, the absence of similar aggressive timelines and product offerings for Southeast Asia creates a significant gap. This disparity between pledges made in developed markets and the pace of action in the Global South risks undermining Hyundai’s regional competitiveness and alienating a growing segment of environmentally conscious consumers.
Erin Eunseo Choi emphasized the broader implications, stating, "This is not simply a story of government policy succeeding or failing in isolation. It’s a story about which companies adapted their business models fast enough to meet that policy environment – and which didn’t.” Her assessment points to the critical need for automakers to align their global strategies with evolving market demands and environmental imperatives.
The ICCT Global Automaker Rating 2025: A Comprehensive Assessment
Adding further weight to these observations, Dale Hall presented findings from the ICCT’s comprehensive "Global Automaker Rating 2025." This extensive report evaluates the 22 largest global auto manufacturers across six key markets, collectively representing approximately 80% of global new car sales. The rating system provides a granular view of their performance in transitioning to zero-emission vehicles.
Overall Ranking: Leaders Emerge, Laggards Lag Behind
The ICCT report clearly identifies Tesla and BYD as leading the global charge, occupying the top tier of the overall ranking. In stark contrast, Japanese manufacturers collectively occupied the bottom five positions, signaling a significant lag behind their global peers in electrification efforts. This finding reinforces the concerns raised about their strategic approach and market performance.
Zero-Emission Vehicle (ZEV)-Equivalent Sales Share: A Growing Divide
The analysis of ZEV-equivalent sales share reveals that nearly all evaluated automakers have increased their electric sales share. Chinese brands such as Geely, Changan, and SAIC are at the forefront of this trend. However, the report highlights that legacy foreign automakers continue to lag significantly behind these frontrunners. To meet upcoming climate standards and remain competitive, these established players will need to dramatically accelerate their EV sales volumes.
ZEV Investment: A Divergence in Future Commitments
A critical indicator of future market positioning is investment. Chinese manufacturers are demonstrably ramping up their capital investments per vehicle, with a clear strategic focus on expanding their presence in high-growth markets like Southeast Asia and Latin America. Conversely, legacy automakers in the US, Europe, and Japan have either scaled back or maintained flat investment levels in ZEVs. This cautious approach risks weakening their future market position as the global automotive industry irrevocably shifts towards electrification.
ZEV Targets: Ambitions Scaled Back or Accelerated?
The report also scrutinizes automakers’ declared ZEV targets. While leaders like Changan and BYD have strengthened their ambitious goals for EV adoption, several major legacy brands have, alarmingly, rolled back or lowered their 2030 EV targets. This retreat often involves a pivot towards hybrid technologies, a move that directly threatens global climate targets and undermines the collective effort to limit global warming.
Dale Hall elaborated on this strategic divergence: "In terms of long-term strategic vision, we see a clear divergence across regional lines. Several of the legacy brands – like Stellantis in Europe, Ford in the US, and Honda in Japan – reduced their mid-term targets amid short-term policy changes and are trying to hedge their investments by adopting more flexible platforms and hybrids, reducing their EV investments. Whereas the market leaders – like BYD, Geely, and SAIC, all from China – are aggressively increasing their EV investments and expanding their production capacity into new markets, again like Southeast Asia and Latin America. That will continue to give them more economies of scale and further footholds in the fastest-growing car markets in the world.”
Implications for the Global Automotive Industry and Climate Goals
The findings presented by Greenpeace East Asia and the ICCT paint a clear picture of an automotive industry at a critical juncture. Companies that are aggressively investing in and prioritizing the transition to battery-electric vehicles are not only gaining market share in key growth regions but are also positioning themselves for long-term success. Conversely, those that are hesitant or strategically delaying their electrification efforts, particularly in emerging markets like Southeast Asia, risk significant market erosion and a diminished role in the future of mobility.
The implications extend beyond corporate competitiveness. The pace of EV adoption directly impacts global efforts to combat climate change. As highlighted by the disparity in vehicle emissions in Southeast Asia, a slower transition in certain regions can lead to a disproportionate burden of environmental pollution on vulnerable populations. The ICCT’s analysis of ZEV targets further underscores the urgency, with any rollback of ambitious goals posing a direct threat to achieving global climate objectives.
As the world continues its inexorable shift towards sustainable transportation, the strategic decisions made by automakers today will have profound and lasting consequences for both the industry and the planet. The data presented by these organizations serves as a critical call to action for all stakeholders to accelerate the transition to zero-emission vehicles and ensure a cleaner, more equitable future.
Evan Lee Salim
Basiran
