Southeast Asia risks losing EV value without supply chain buildout, Bain says

Indonesia controls over 60% of nickel output but the region makes only 2% of EVs.

Southeast Asia (SEA) risks losing much of the economic value from electric vehicle (EV) adoption unless the region builds a coordinated manufacturing and supply chain ecosystem before global production networks solidify between 2025 and 2028.

A Bain & Company report said the region has emerged as a leading EV adoption market, with Singapore, Vietnam, Thailand, and Indonesia ranking amongst the top 15 global markets for four-wheeler EV penetration.

However, about 70% of EV value generated from regional demand still flows outside SEA as the region accounts for only about 2% of global EV manufacturing output.

The report estimated SEA could capture an additional $130b to $160b in annual value by 2035 if regional economies expand participation across the EV value chain through cross-border integration.

Global four-wheeler EV sales reached about 20.7 million units in 2025, growing at an annual rate of 47% since 2020.

Battery pack prices fell from about $1,500 per kilowatt-hour in 2010 to about $110 per kilowatt-hour in 2025, according to the report.

The report said China controls about 65% of global battery production and more than 70% of global EV output.

Chinese EV production costs are 10% to 15% lower than in SEA and more than 30% lower than in advanced economies.

In battery manufacturing, the top five companies hold about 75% of the market.

Battery manufacturing and original equipment manufacturer (OEM) production account for about 95% of the EV value pool, the report said.

The region’s strongest position remains in raw materials. Indonesia holds about 40% of global nickel reserves, produces more than 60% of global nickel output, and contributes about 12% of global cobalt production.

However, SEA holds only about 2% of global battery production and about 2% of global EV output.

The report said about 15% of SEA’s automotive manufacturing capacity has shifted towards EV production.

It outlined three potential pathways for the region: a continuation of current market-led growth, a “solo trajectory” based on national protectionism, and a “contested integration” model combining regional competition and collaboration.

The report identified “contested integration” as the preferred pathway, stating it could unlock two to three times more value than the current trajectory.

Under the proposed regional model, Thailand would serve as a manufacturing and export hub, whilst Indonesia would act as an integrated industrial base linked to nickel and cobalt production.

Vietnam would become an OEM-led ecosystem builder, whilst Malaysia and Philippines would participate in components and assembly, and Singapore would serve as a standards and capital coordination centre.

The report said decisions made between 2025 and 2028 will shape the region’s EV industrial position for the next two decades because global automakers are finalising production footprints and supply chain platforms during the period.

It added that strong consumer demand alone will not allow SEA to capture EV value unless the region localises manufacturing and supply chains through regional integration.