Tesla’s once unassailable position in the electric vehicle (EV) market continues to erode in 2025 as Chinese automaker BYD dominates the global EV landscape with its recipe of innovation and aggressive pricing.

The US electric vehicle pioneer, led by Elon Musk, now struggles against BYD’s global expansion and technological advances that are reshaping consumer expectations worldwide. The power shift has fundamentally altered the competitive dynamics of the global EV industry, with profound implications for automakers across all markets.

Revenue milestone

According to a stock filing published Monday at the Shenzhen stock exchange, BYD’s 2024 revenue reached 777.1 billion yuan ($107.2 billion), ahead of Tesla’s $97.7 billion. The crossover in leadership position marks the first time the Chinese automaker has surpassed its American rival in revenue.

“BYD’s revenue results represent a 29% increase from the previous year and outperformed a Bloomberg forecast of 766 billion yuan,” reported AFP. BYD’s net profit reached 40.3 billion yuan, up 34% from 2023, and it recorded a record quarterly profit of 15 billion yuan in Q4 2024. The timing is significant, coinciding with Tesla’s declining sales trajectory in most major markets and BYD’s aggressive expansion into international territories previously dominated by Western manufacturers.

The “Model 3 killer” strategy

Perhaps most threatening to Tesla’s position is BYD’s direct assault on its bestselling Model 3. On Sunday, BYD launched the Qin L, priced at just 119,800 yuan ($16,517), positioning it as what the South China Morning Post describes as a “Model 3 killer.”

For comparison, the basic edition of Tesla’s Model 3 in China is priced at 235,500 yuan – more than double. Despite the price difference, the Qin L offers competitive specifications with a driving range of 545km to Model 3’s 634km. Both cars feature preliminary self-driving software and digital cockpits, demonstrating BYD’s ability to at least match Tesla’s technology at a significantly lower price point.

“BYD has already impressed most Chinese drivers as a maker of reliable electric cars, and its new products that are affordable to middle- and low-income consumers will lure some Tesla fans away from its Model 3 and Model Y,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “As it enjoys a pricing advantage, Qin L will easily generate thousands of deliveries a month.”

Meanwhile, Guangzhou-based Xpeng is challenging Tesla and BYD with its Mona M03, priced the same as the Qin L at 119,800 yuan. The company shipped more than 15,000 units of the Mona M03 in February.

Global sales disparity: How BYD dominates Tesla

The contrast in sales performance is stark. BYD reported selling 322,846 cars in February 2025, up 164% on last year. According to AFP, its monthly sales jumped 161% in February to 318,000 units. Meanwhile, Tesla’s shipments from China dropped 49% in February, with the automaker shipping 30,688 vehicles – the lowest monthly figure since July 2022.

On a broader level, Tesla’s market share in China has dropped from more than 16% of the market in 2022 to 4.3% in February 2025.

Tesla’s global decline

Tesla’s challenges extend beyond China. According to TIME, the company’s stock dropped 15% on Monday, its steepest decline in five years. European sales have been particularly hard hit, with Tesla selling just 7,517 vehicles in Europe in January, half of what it sold in January the previous year, despite overall rising EV sales in the region.

In Germany, Tesla sales were down more than 70% compared to last year, with less than 1,500 new Teslas registered in February. Similar patterns emerged across Europe, with sales falling 50% in Portugal, 45% in France, 42% in Sweden, and 48% in Norway between January and February 2025. The UK is the only country where the brand remains in increased demand.

Australia has also seen Tesla sales drop over 70% compared to last year, with just 1,592 sales in February compared to 5,665 in February 2024, according to The Guardian. Even in California, Tesla’s home market and the largest domestic market for EVs in the US, sales have slumped for five consecutive quarters.

Technology race

BYD isn’t winning on price alone. The company is pushing technological innovation, recently unveiling its “Super e-Platform” battery and charging system. The system boasts peak speeds of 1,000 kilowatts – double the 500 kilowatts currently offered by Tesla’s Superchargers. The system allows cars to travel up to 470 kilometres after just a five-minute charge.

Last month BYD announced that at least 21 of its models, including the Seagull hatchback that starts at just 69,800 yuan, would be fitted with its advanced driver assistance system at no additional cost. The system allows cars to navigate and drive semi-autonomously on roads and park itself.

Tesla’s response

To counter its sales decline in China, Tesla is currently designing a cheaper version of its bestselling Model Y. According to the South China Morning Post, the new edition will be 20% cheaper than the existing variants available in China, which range in price from 263,500 yuan to 303,500 yuan. The US firm plans to start making the car at its Shanghai factory next year.

As reported by Reuters, Tesla has also sent engineers to work with Baidu to integrate Chinese map data with Tesla’s driver-assistance systems, helping vehicles better recognise mainland China’s lane markings and traffic signals. When asked about managing his various businesses amid these challenges, Musk told Fox Business’s Larry Kudlow that he was doing so “with great difficulty.”

Market valuation gap

Despite BYD’s revenue gains, Tesla maintains a significant lead in market valuation. Fortune reports that, “Tesla is worth about $800 billion despite a share-price rout that’s seen the stock plunge 38% this year. BYD has a market capitalisation closer to $157 billion.”

Tesla also continues to lead in profitability ratio, with a 2024 net income of $7.6 billion compared to BYD’s approximately $5.6 billion (40.3 billion yuan). This suggests that while BYD dominates sales volume and revenue, Tesla maintains higher profit margins per vehicle.

Outlook

Wang Chuanfu, BYD’s chairman and founder, stated that Chinese auto brands in the era of intelligence-led vehicles were no longer merely followers but at the forefront of the trend. “They’re ‘daring’ to be first in the world and are collaborating with other domestic brands to go global and move up the value chain,” he said, according to Fortune.

The company that once dominated the EV landscape faces questions about its positioning and strategy. With production shortages affecting its upgraded Model Y deliveries in Shanghai and competitors offering comparable technology at half the price, Tesla’s first-mover advantage has largely evaporated. The global EV race has entered a new phase, and BYD dominates Tesla in ways few would have predicted just a few years ago.

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Tesla is designing a cheaper Model Y and enhancing its autonomous-driving capabilities in China as it scrambles to reverse a worldwide sales slide.

The Tesla sales decline has become a challenge for the electric vehicle maker. To combat plummeting market share, the new Model Y variant is planned to be 20% cheaper than existing models.

Once the undisputed leader in the global EV market, Tesla is grappling with consumer backlash against CEO Elon Musk’s political association with the Trump administration and increasingly fierce competition from local rivals in key markets. According to the South China Morning Post, the company’s market share in China has dropped dramatically from more than 16% in 2022 to just 4.3% in February 2025.

Stock market response

The impact has been felt on Wall Street, where Tesla’s stock dropped 15% on Monday, marking its steepest decline in five years. According to TIME, the drop came alongside a stock market plunge following President Donald Trump’s hint at a recession. The president acknowledged Tesla’s struggles in a post on Truth Social, where he blamed “radical left lunatics” for boycotting Musk’s EV company and pledged to “buy a brand new Tesla” himself.

European market struggles

The decline in Tesla sales is particularly pronounced in Europe. According to the European Automobile Manufacturers’ Association (ACEA), Tesla sold just under 7,517 vehicles in Europe in January, half of January 2024 sales. The decline comes despite the rise of overall battery and hybrid electric vehicle sales as the European Union (EU) continues to tighten regulations on emissions from new vehicles.

In February, electric vehicle sales in Germany, the largest market for EVs in the EU, rose 30% year over year, yet Tesla sales were down more than 70% compared to last year. TIME reports that less than 1,500 new Teslas were registered in Germany in February.

Other European countries have also witnessed Tesla’s market share erode. Between January and February of 2025, Tesla recorded a 50% drop in sales in Portugal and 45% in France, according to Reuters, while sales fell 42% in Sweden and by 48% in Norway.

Australian and Chinese markets

The Tesla sales decline includes Australia, where data from the Electric Vehicle Council shows that Tesla sales dropped over 70% compared to last year, with just 1,592 sales in February compared to 5,665 in February 2024, as reported by The Guardian.

In China, Tesla is facing particular challenges. Tesla sales in China dropped 49% in February, with the automaker shipping 30,688 vehicles – the lowest monthly figure since July 2022, according to Bloomberg. Tesla’s market share in the country has plummeted from more than 16% in 2022 to just 4.3% in February 2025, as reported by the South China Morning Post.

Chinese automaker BYD has emerged as a formidable competitor, selling more than 318,000 electric and hybrid cars last month – a 161% increase from last year. In December, sales of Tesla’s Model 3 fell behind those of the SU7, developed by smartphone vendor Xiaomi, by 25,815 to 21,046.

US market challenges & the bright spots amid global decline

Even in Tesla’s home market, the company is facing headwinds. In California – the biggest domestic market for EVs thanks to its state mandate that 35% of new 2026 car models sold must be zero-emissions – Tesla sales slumped for the fifth consecutive quarter, according to data from the California New Car Dealers Association (CNCDA).

However, not every market has seen a similar decline. Britain saw a record number of EV sales in 2024, and Tesla sales were up 20% in February, bucking the global trend.

Musk’s response to global challenges

When Fox Business’s Larry Kudlow asked Musk how he was managing his various businesses amid these challenges, Musk candidly admitted he was doing so “with great difficulty.” Tesla has not officially released a statement addressing its falling sales, but its actions in various markets speak of the company’s recognition of the severity of the situation.

Competition intensifies as price war unfolds

Mainland China is Tesla’s second-largest market worldwide, trailing only the US, and the Shanghai factory is the carmaker’s most extensive production base. However, the company faces increasingly sophisticated competition from local manufacturers offering comparable or superior technology at significantly lower prices. An entry-level edition of Xpeng’s Mona M03, an EV fitted with preliminary autonomous-driving technology, costs 119,800 yuan, just half the price of the Model 3.

The price disparity illustrates the fundamental challenge Tesla faces in markets like China, where domestic manufacturers have rapidly closed the technological gap while maintaining a substantial cost advantage. Chinese brands also employ aggressive pricing strategies that Tesla has struggled to match. According to China Passenger Car Association data, a record 227 models, including electric and petrol cars, had their prices cut in 2024, compared with 148 in 2023. The price war puts additional pressure on Tesla’s margins when the company is already contending with declining sales volumes.

The road ahead: Critical challenges mount

The decline in Tesla sales represents a pivotal moment for the company that once dominated the EV landscape. While Tesla is taking steps to address its challenges – particularly in China with its new lower-priced Model Y and enhanced autonomous capabilities – these moves may be too little, too late as competitors continue to gain momentum.

Tesla’s production problems compound its market challenges. Even as the company unveiled an upgraded Model Y in China in late February, buyers in Shanghai are still waiting for deliveries due to production shortages, according to the South China Morning Post. These operational issues further erode consumer confidence at an important juncture. The reality facing Tesla is stark: its first-mover advantage has largely evaporated, and the company now finds itself in unfamiliar territory – playing defence rather than setting the agenda for the industry.

With EV adoption accelerating globally and Tesla’s share of the growing market shrinking, the company faces existential questions about its positioning and strategy. For a company whose stratospheric valuation was predicated on market dominance and industry leadership, this period of retrenchment signals a fundamental recalibration of Tesla’s prospects.

Whether Musk’s company can regain its footing in an increasingly crowded landscape remains today’s a pressing question in the electric vehicle industry.

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Chinese EV dominance in the global automotive sector reached a new milestone as BYD surpassed Tesla in quarterly deliveries at the end of 2024. The transformation of China’s automotive sector towards global leader reflects years of strategic investment and government support. BYD’s delivery of 595,413 electric vehicles in Q4 2024, compared to Tesla’s 495,570, represents more than just impressive numbers – it symbolises China’s emergence as a centre of global EV production. Tesla maintained a narrow annual lead in vehicles sold with 1.79 million deliveries versus BYD’s 1.76 million.

Shifting market dynamics to Chinese EV dominance

The global EV landscape has undergone a transformation. Chinese manufacturers, led by BYD, have successfully combined technological advancement with cost efficiency, creating products that appeal to domestic and international markets. The strategy has proved particularly effective as global markets become increasingly price-sensitive. BYD’s comprehensive approach to the EV market stands out for several reasons:

• Vertical integration in battery production,
• Aggressive pricing strategies in international markets,
• Robust supply chain management,
• Diverse product portfolio spanning multiple price points.

International expansion

Chinese EV output is expanding beyond domestic borders. BYD’s strategic entry into European and Southeast Asian markets demonstrates the growing confidence of Chinese manufacturers in competing globally. The expansion comes at a crucial time when traditional markets are experiencing significant shifts in consumer behaviour and government policy.

In Europe, Tesla saw a 40% sales decline in November 2024 while Chinese manufacturers gained ground. The end of EV subsidies in key markets like Germany has created an opportunity for cost-competitive Chinese vehicles to capture market share. Meanwhile, in Southeast Asia, Chinese brands are establishing strong positions in emerging markets.

Tesla’s response to market changes

Tesla’s position as an unchallenged leader in EVs has faced significant pressure. The company’s first annual sales decline, with deliveries falling to 1.79 million units in 2024 from 1.8 million in 2023, reflects changing market dynamics. Tesla’s heavy reliance on Model 3 and Model Y vehicles, which account for over 95% of their deliveries, contrasts with the diverse product offerings from Chinese manufacturers.

Market implications and future outlook

The rise of Chinese EVs has prompted a global industry response. Traditional automakers and new EV startups are reassessing their strategies, particularly in pricing and market positioning. Tesla’s announcement of targeting 30% growth in 2025 through a new, more-affordable vehicle model reflects the competitive pressure it feels. The broader EV market is entering a new phase characterised increased competition across all price segments.

For Asian markets, the market shift represents an opportunity and a challenge. While Chinese manufacturers lead the charge in EV innovation and production, other Asian automotive manufacturers have to adapt to maintain competitiveness.

The market’s reaction to the recent news has been measured but significant. Tesla’s stock has shown resilience, suggesting that investors recognise the long-term nature of the EV market. Meanwhile, global investment in Chinese EV manufacturers continues to grow, reflecting confidence in the sustainability of Chinese EV manufacture.

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Germany has long been known as Europe’s car capital, with slogans such as Vorsprung durch Technik (progress through technology) reflectiong the country’s industrial strategy. However, Volkswagen is now faces significant challenges as trade unions battle potential layoffs and factory closures. This isn’t simply a Volkswagen issue; it raises larger concerns about the future of Europe’s car industry.

A big part of the concern is the emergence of China’s electric vehicles, which are cheaper and are quickly gaining traction in Europe. In addition, the traditional combustion engine is slowly becoming a thing of the past, with EU legislation in place designed to phase out oil-burning engines within the next few decades.

In response, the EU, US, and Canada intend to impose tariffs on Chinese-made electric vehicles. However, the plan is not supported by all. Some European carmakers are afraid that new tariffs may hasten the closure of car plants, particularly in Germany.

The Paris Motor Show made it clear that the European car sector is under pressure. Chinese carmakers were represented in full force, eager to break into the European market – the biggest market left to them after the US slapped heavy tariffs on Chinese vehicles.

Reactions to the tariffs have been the epitome of different. As The Guardian reported, Carlos Tavares, the CEO of Stellantis (which owns brands like Citroën, Fiat, and Jeep), warned that the EU’s tariffs could do more harm than good. He pointed out that Chinese manufacturers, like BYD, are already planning to sidestep the tariffs by setting up shop in Europe by building manufacturing facilities on the continent.

Tavares predicted that Chinese carmakers would not be building in Germany, France, or Italy (the traditional bases for Europe’s car industry). Instead, they will favour countries like Hungary, where labour costs are lower. And this shift, he claims, will simply hasten plant closures across the rest of Europe, defeating the purpose of the tariffs.

His concerns also expose deeper disagreements in the EU. France, led by President Emmanuel Macron, is in favour of the tariffs, while Germany was one of the few countries that voted against them. In the past, Germany would have had enough influence to be able to unite other EU nations, but that’s not happening under Chancellor Olaf Scholz.

With no clear leadership, the European car industry has to fight for its future. Faced with economic challenges and weak demand for electric vehicles, industry leaders such as Stellantis are advocating for more time to adjust to the new world of electric vehicles rather than relying on tariffs to protect them.

BMW’s CEO, Oliver Zipse, has called for pushing back the EU’s 2035 deadline for ending the production of new combustion engine cars. The European Commission has said it’s open to discussions, but for now, the deadline remains, giving the industry 11 years to make the transition.

Meanwhile, China’s BYD is not wasting time. The company plans to build all of the cars it sells in Europe in the European economic zone, and to manufacture battery packs—the most expensive component of an EV—in Hungary and Turkey. Other Chinese carmakers, such as Geely (which owns Volvo and Lotus), are aiming to establish a greater presence in Europe, while emerging players like Dongfeng and Seres are anxious to broaden their footprint.

Interestingly, some European carmakers now collaborate with the very Chinese competitors that are threatening their future.

Tariff debate: Free market vs. protectionism

While the EU, US, and Canada push for tariffs to protect their industries, it raises a big question: Are we truly committed to free-market competition, or are we drifting toward protectionism?

Governments typically support open competition and minimal intervention, but tariffs seem to contradict that liberal approach. Some argue that by shielding European carmakers from their Chinese rivals, the EU is limiting competition, which could stifle innovation and hurt consumers in the long term. It’s a difficult balance to find, and the debate emphasises the conflict between protectionist policies and the free-market values.

As Europe’s car industry tries to navigate the rise of Chinese electric vehicles and the impact of new tariffs, the question of protectionism versus free competition will continue to shape its future. Whether the industry can hold on to its global leadership position or whether China will its decline is still to be seen. But one thing’s for sure—the road ahead is full of both challenges and opportunities.

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China is increasingly asserting itself as a significant contender in the electric vehicle (EV) market.

Xiaomi Corp.’s billionaire co-founder recently revealed the company’s first electric vehicle, the SU7, aiming to compete with industry leaders like Tesla Inc. and Porsche AG within the next two decades. This unveiling in Beijing featured the car autonomously entering the stage during a presentation by CEO Lei Jun.

The SU7: features and ambitions

At the event, held at the China National Convention Center, Lei Jun extensively discussed the SU7’s features. These include a remarkable range of 800 kilometers per charge, adjustable spoilers, various unique colors, and a top speed of 265 kilometers per hour.

The SU7, a five-seat sedan, will incorporate batteries from top Chinese manufacturers, Contemporary Amperex Technology Co. Ltd. and BYD Co., with single and dual motor configuration options.

Lei’s venture into the EV market signifies a significant US$10 billion investment, aiming to mirror Xiaomi’s disruptive impact in the smartphone industry. Lei considers this venture his ultimate entrepreneurial project.

At the launch event on December 28, Lei stated Xiaomi’s ambition to rival luxury car brands like Porsche and Tesla. However, China’s regulatory and competitive landscape, the largest car market globally, has significantly shifted since his 2021 EV announcement.

Xiaomi faces regulatory hurdles in China, including manufacturing permit limitations, necessitating a partnership with Beijing Automotive Group Co. for EV production. The end of significant state EV subsidies in 2022 further complicates the situation. The SU7 joins a crowded marketplace, with many models from various brands already in play or production.

Lei has positioned the SU7 alongside Porsche’s Taycan Turbo and Tesla’s Model S in terms of performance and technological features, respectively. Although these models are priced much higher, the SU7 is anticipated to be more affordable, though its exact price is yet to be revealed.

Addressing market speculation, Lei hinted that the SU7’s price would surpass the rumored 99,000 yuan, noting that similar spec models often cost over 400,000 yuan.

Tesla sold fewer than 200 revamped Model S vehicles in China in 2023. Porsche, meanwhile, delivered around 3,600 Taycan EVs in 2023, according to the China Automotive Technology and Research Center.

Slated for release next year, the SU7 boasts impressive acceleration, going from 0 to 100 kph in just 2.78 seconds. Its motor surpasses the RPM of both the Model S and Taycan Turbo. Xiaomi utilizes a gigacasting manufacturing process, similar to Tesla’s, but with its own advanced hypercasting system.

Xiaomi, evolving from its origins as a budget smartphone manufacturer, seeks growth in the saturated global market. Following a period of sales declines, the company is venturing into the EV market, competing with established and emerging players like Huawei Technologies Co.

Since committing to the SU7 project, Lei has personally tested over 150 cars. Xiaomi’s shares experienced slight fluctuations following the vehicle’s announcement. Lei describes the SU7 as a “performance beast,” targeting a consumer base that values technology, performance, and sophistication.

Global EV market trends and how China is evolving

Despite ending its subsidy program, China continues to lead in global EV sales, achieving record figures in October, as market research firm Rho Motion reported.

Although China concluded its 11-year EV purchase subsidy policy in 2022, some local governments still offer financial incentives and tax rebates to promote investment and consumer subsidies.

Even without subsidies, China, boasting the world’s largest auto market, saw a 29% increase in EV sales year-to-date as of September. This reflects the global EV market, which experienced a 34% growth during the same period.

Rho Motion highlights that China is entering its traditionally strongest sales period for this year. Notably, China’s EV demand continues to soar, reaching new heights in October despite the subsidy cut, with Rho Motion predicting another record-breaking year in EV sales for 2023.

In Europe, EV markets grew by 26%, although the cessation of subsidies, especially in Germany, has affected demand. Rho Motion notes the significance of this change in Germany, where commercial registrations make up nearly two-thirds of total passenger car registrations.

Major automakers like Tesla, Mercedes Benz, and Volkswagen have noted the impact of high interest rates and a subdued market environment in Europe on customer interest.

In contrast, EV sales in North America have surged by 78% this year. Rho Motion observes that while Tesla dominates the market, other established automakers are cautiously approaching production scale-up.

Despite price reductions, Tesla’s market share in the third quarter fell to a record low of about 50%, as reported by Cox Automotive in October. This decrease in market share occurred despite Tesla’s efforts to make its vehicles more affordable.

Lei Jun publicly acknowledged his industry peers on social media, including BYD, XPeng Inc., Li Auto Inc., and Huawei, lauding them as innovators in China’s new energy vehicle sector. On December 27, XPeng’s CEO He Xiaopeng took to Weibo to welcome Xiaomi to the automotive industry, expressing hope for strong sales in 2024.

Nio’s new flagship model and market expansion

It’s notable that Nio, another Chinese EV manufacturer, recently launched its flagship model featuring proprietary technology, including semiconductors. This launch is part of Nio’s strategy to boost earnings amid a competitive price war and a slowdown in car demand.

The ET9 executive sedan, set to compete with luxury models such as Mercedes Benz’s Maybach and Porsche’s Panamera series, is expected to begin deliveries in the first quarter of 2025. Priced at around 800,000 yuan (USS$152,355), this announcement was made by Nio’s founder and CEO William Li at the company’s annual “Nio Day” event.

At the event in Xian, Li showcased the ET9’s cutting-edge features, including Nio’s own autonomous driving semiconductor, a 900-voltage electric drive for faster charging, and sizable cylindrical battery cells.

Li also boasted about the sedan’s superior suspension technology, claiming it surpasses that of the Panamera. This technology is supplied by US startup ClearMotion, in which Li’s venture capital firm, Nio Capital, has invested.

Nio’s plans also include a significant expansion of its infrastructure, intending to double its public chargers and add 1,000 battery-swapping stations in China by 2024. This infrastructure development is expected to boost the appeal of Nio’s EVs to consumers and improve the company’s profit margins in a consolidating market.

This month, Nio secured a significant investment of US$2.2 billion from CYVN Holdings, an Abu Dhabi-backed entity, marking one of the most substantial investments in a Chinese EV company this year.

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In 2023, Alibaba Cloud has been a key player in Malaysia’s journey towards digital transformation, significantly enhancing the technology landscape across multiple industries. This involvement has led to modernizing sectors like logistics, automotive, and financial services. By implementing Alibaba Cloud’s technology solutions, Malaysian businesses and public institutions have experienced a marked improvement in operational efficiency and customer engagement, strengthening their competitive stance in the digital world.

This year, Alibaba Cloud has bolstered various Malaysian businesses across industries such as logistics, automotive, and financial services, helping them in their digital transformation endeavors. These efforts have streamlined operations and spawned innovation, contributing to the digital advancement of these sectors.

Malaysian enterprises and public institutions have benefited from the partnership with Alibaba Cloud, achieving enhanced logistics efficiency, innovative financial services, and a boost in digital capabilities across sectors. Alibaba Cloud’s technology has been instrumental in optimizing business operations and elevating customer experiences, giving these entities a competitive advantage in the rapidly-evolving digital arena.

Kun Huang, the general manager of Malaysia at Alibaba Cloud Intelligence, expressed satisfaction with the impact of their advanced technologies on Malaysian businesses. Huang said that Alibaba Cloud was spearheading a shift towards digital excellence through strategic partnerships and innovative solutions. The company’s unwavering commitment to empowering Malaysian enterprises is central to its strategy, as it continues to contribute to building a digitally resilient and globally competitive business environment in Malaysia.

Alibaba Cloud pioneering digital solutions

In 2023, Alibaba Cloud expanded its reach in East Malaysia by partnering with two public service organizations, Sabah Credit Corporation (SCC) and SAINS.

SCC, a statutory body under the Sabah State Government, has enhanced its operations by adopting Alibaba Cloud’s enterprise mobile application studio (EMAS) superapp solution. This integration has streamlined SCC’s various applications, including YONO Finance, Sabah Pay, and YONOPay, into a unified mobile platform named YONO. This consolidation has helped SCC overcome technical challenges, accelerate its superapp development, and efficiently manage app lifecycles at a reduced cost through centralized management.

On the other hand, SAINS has initiated Malaysia’s first Alibaba Cloud private cloud program, significantly propelling digital transformation in East Malaysia. This initiative brings advanced cloud computing and innovative technology to various sectors in the region. Alibaba Cloud’s Apsara Stack solution, which provides flexible and reliable hosting services, is central to this development,  improving system recovery times after disruptions.

SAINS has always been at the forefront of application development since its inception. With advancements in mobile and cloud technologies, SAINS is adapting to increasing customer demands for application reliability and swift disaster recovery. To meet these expectations, SAINS is focusing on quick auto-recovery for client applications.

The infrastructure developed by Alibaba Cloud is tailored for hyperscaling and top-tier disaster recovery, aligning with SAINS’s growth objectives and stringent security protocols. A vital feature of this deployment is the establishment of two availability zones in Sarawak for disaster recovery, letting SAINS and the Sarawak Government run applications across these zones simultaneously, thus ensuring enhanced operational resilience and efficiency.

Driving automotive innovation: the Agmo EV superapp

Agmo Holdings Berhad, a Malaysian digital solutions leader, has collaborated with Alibaba Cloud to create the Agmo electric vehicle (EV) superapp. This innovative platform has transformed the EV user experience, offering real-time charging status monitoring and personalized energy consumption insights. The superapp has reshaped the user interface for EV enthusiasts, setting new standards in smart technology integration within the automotive industry.

The Agmo and Alibaba Cloud partnership combines local innovation and global technology expertise. This collaboration has positioned the Agmo EV superspp as a frontrunner in sustainable and connected mobility solutions in the region.

Alibaba Cloud digitally transforming financial services

Alibaba Cloud has significantly helped digitally transform Malaysia’s financial services industries (FSI), encompassing banking, insurance, securities, and fintech. Its services align with the Malaysian government’s Financial Sector Blueprint 2022-2026, catalyzing the nation’s digital transformation and financial sector innovation.

A notable example is Alibaba Cloud’s Infrastructure as a Service (IaaS) solutions, particularly supporting Malacca Securities’ M+ global app. This digital trading platform offers Malaysians an intuitive and interconnected trading experience, enabling them to make informed decisions in the global markets.

Additionally, Alibaba Cloud’s financial solutions have significantly benefited major Malaysian clients like Permodalan Nasional Berhad (PNB) and Touch’n Go Digital. Adopting these solutions ensures adherence to rigorous security standards crucial for Financial Services Institutions.

Elevating logistics with cutting-edge AI

Alibaba Cloud has been instrumental in advancing Malaysia’s logistics industry, as evidenced by the success stories of EasyParcel and Global Track. EasyParcel, an online delivery service, has enhanced its operations through Alibaba Cloud’s AI technology. This has led to optimized delivery routes and improved overall logistics efficiency, improving EasyParcel’s customers’ experience.

Global Track, a smart logistics service provider in Malaysia, has effectively implemented real-time tracking systems using Alibaba Cloud’s AI capabilities. This technology has provided unparalleled visibility into the movement and security of goods, enhancing the security of the supply chain and offering valuable insights for optimizing business operations.

These success stories from EasyParcel and Global Track testify to Alibaba Cloud’s ability to combine global technological expertise with local innovation. This collaboration underscores Alibaba Cloud’s commitment to fostering a digitally resilient and efficient business landscape in Malaysia, enhancing customer experiences across various sectors.

Sustainability goals: Alibaba Cloud’s green initiatives

Alibaba Cloud supports various Malaysian industries in their sustainability efforts, including asset management, manufacturing, and the internet sector. This support centres around their energy expert platform, a Software-as-a-Service solution for sustainability and carbon management. This initiative aligns with Malaysia’s goal to achieve carbon neutrality by 2050.

The AI-driven energy expert platform enables enterprises to efficiently track, analyze, and manage carbon emissions from daily business activities. This collaboration between Alibaba Cloud and local enterprises accelerates business innovation, focusing on sustainable growth and helping companies manage their carbon neutrality strategies through data intelligence and AI technologies.

Key Malaysian companies are utilizing Alibaba Cloud’s energy expert solutions to advance their sustainability goals. UEM Edgenta Bhd has integrated this solution into its Edgenta NXT platform, automating the carbon emission calculation and certification process.

Meanwhile, Hond Tat Industries Sdn Bhd, a manufacturer of disposable hygiene products and polyethylene packaging, uses the platform to provide clearer information about carbon footprint reduction in its manufacturing processes. These efforts are part of a broader movement towards sustainable development in the Malaysian business landscape.

Overall, Alibaba Cloud’s contributions in 2023 have been pivotal in shaping a digitally advanced and sustainable future for Malaysia, demonstrating the company’s ability to blend global technological expertise with local innovation and commitment to fostering a digitally resilient business landscape.

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Thailand has long been an auto hub in Southeast Asia. Even as the pivot to electric vehicles has gathered pace over the last few years, the country managed to maintain its grip on the industry. In fact, after leading the region with the most EV sales in 2022, Thailand has emerged as the leading country, with the most battery electric vehicle sales in the first three months of this year.

Southeast Asia’s second-largest economy with a population of over 71 million, Thailand boasted the highest proportion of battery-electric vehicles in total passenger vehicle sales, followed by Singapore and Vietnam. According to the latest research from Counterpoint’s SEA Passenger Electric Vehicle Model Sales Tracker, the region’s passenger battery electric vehicle sales grew by almost ten times year-on-year (YoY) in the first quarter of 2023 (1Q23). 

The share of BEVs in total passenger vehicle sales experienced significant growth in Q1 2023, reaching 3.8% compared to a mere 0.3% one year ago. However, plug-in hybrid electric vehicle (PHEV) sales saw a modest YoY growth of 5.8%. “Thailand emerged as the leading country, capturing over 75% of the BEV sales, followed by Indonesia and Vietnam,” the report stated.

For context, Thailand has the largest automotive industry in Southeast Asia and the 10th largest in the world, according to the Thailand Board of Investment (BOI). The country aims to transition 30% of its auto production to EVs by 2030. So far, the country’s emergence as an EV hub has been fast-tracked by highly favorable government policies that comprehensively incentivize investors in the EV sector’s supply chain and car buyers. 

The initial focus is to promote EV sales within the country, then replace its automobile export with EVs. So far, the production-led EV policy is bearing fruit — EV sales in Thailand comprised 3% of total automobile sales in 2022. “Thailand’s government-led efforts to promote EV sales have yielded positive outcomes, while Indonesia and Vietnam are also performing well in the region,” Counterpoint’s research analyst Abhilash Gupta said in a note last week.

Gupta, however, reckoned that Malaysia, the Philippines, and Myanmar require additional regulatory support and encouragement to foster EV growth. “Despite overall passenger vehicle sales remaining relatively stagnant, the sales of BEVs have experienced a significant and rapid expansion. Besides, the market for hybrid electric vehicles has experienced remarkable growth in SEA, playing a pivotal role in transitioning from traditional internal combustion engine (ICE) vehicles to EVs,” he noted.

Separately, Counterpoint’s senior analyst Soumen Mandal observed that Thailand’s EV sector had witnessed a significant rise in foreign direct investment in the past year. “Notably, several Chinese automakers, including Great Wall Motors, BYD, Hozon New Energy, and Changan Automobile, have shown interest in establishing or have already commenced the construction of production facilities in Thailand.”

Similarly, Mandal said Indonesia announced a subsidy package in March 2023 to promote the purchase and manufacturing of EVs, with a particular focus on increasing local production. The move is expected to accelerate the production and sales of EVs in the region.

Chinese automaker makes up 3 out of 4 BEVs sold in SEA

Counterpoint also highlighted that Chinese auto groups are experiencing rapid growth and outpacing their competitors in the SEA region, with their market share increasing from 38% a year ago to nearly 75%. For instance, in the first three months of this year alone, BYD Group emerged as the BEV leader in the SEA region, capturing the majority of sales, followed by Hozon New Energy and SAIC Group. 

“These top three groups collectively accounted for over 68% of the BEV market. Geely Holding Group claimed the top position in the PHEV market, followed by BMW Group and Mercedes-Benz Group,” Gupta said. BYD’s Atto 3 was the best-selling BEV across SEA, followed by the Neta V and Tesla Model Y. In PHEVs, Counterpoint’s report indicated Volvo’s XC60 as the most sold, followed by the BMW 3 series and Mercedes-Benz E-Class.

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Last week, the International Trade & Industry Ministry (MITI) in Malaysia announced that Tesla was given the green light to establish its presence in the country. The American electric vehicle giant is the first applicant of the Malaysia battery electric vehicle (BEV) Global Leaders program, and the approval means Tesla will soon be setting up sales, service, and charging networks in the Southeast Asian nation.

The news was widely welcomed locally, considering how the government has been working to have a significantly higher and more meaningful uptake in the country’s EV adoption. In fact, MITI facilitated the entry of Tesla through the BEV Global Leaders initiative, which aims to help boost demand in the local market and further promote the development of the entire ecosystem to support EV adoption.

In announcing the development, MITI’s Minister Zafrul Aziz said that Malaysia would strategically leverage its established electrical and electronics ecosystem to make the country the preferred investment destination for technology related to electric mobility. “Tesla will establish a Head Office, Tesla Experience & Service Centers, and Supercharger network, simultaneously creating skilled & better-paying jobs for Malaysians,” Zafrul said in a tweet on March 1.

Malaysia Welcomes @Tesla! @MITIMalaysia has approved Tesla's application to import BEVs into Malaysia.

Tesla will establish a Head Office, Tesla Experience & Service Centres, and Supercharger network, simultaneously creating skilled & better paying jobs for M'sians. pic.twitter.com/BbQP7jNazX

— Tengku Zafrul (@tzafrul_aziz) March 1, 2023

The news also triggered buying momentum in local EV-related stocks, signaling the market’s excitement about having such a big EV brand in Malaysia. To recall, in May 2022, Tesla indicated that it was open to establishing a Supercharger DC charger network in Malaysia, which would be helpful for official Tesla customers in Thailand and Singapore.

Tesla had also established Tesla Thailand (for distribution) as part of its expansion in ASEAN, with the first supercharger station launched last week. As for Singapore, superchargers have been available, with the first V3 units – with CCS connectors – installed in 2022, according to local automotive news portal Paul Tan.

While the official entry of Tesla into Malaysia is confirmed, the timeline and which Tesla cars will first land in the country remain to be determined. However, based on previous trends, the brand’s most affordable models – Model 3 and Model Y – may make their entry first. Even in Thailand, those two EV models were the first to hit the local market late last year and are offered in multiple versions.

Why is the entry to Malaysia a timely move for Tesla?

Tesla has steadily expanded its global footprint since it started selling BEVs years ago. Apart from its first and primary market, North America, the company expanded into much of Europe. In the last ten years alone, Tesla has set up more than 4,500 sites worldwide, with an average of nine Superchargers at each location.

The majority are in North America, and for Asia, most are in China. In the last couple of years, the EV giant started looking into the Asia-Pacific region before it began official sales in Singapore in mid-2021 and started up in Thailand this year. Meanwhile, in Malaysia, there have been limited numbers of Teslas that private importers have sold.

However, the absence of an official presence has meant that after-sales support – a vital part of ownership – is not readily available. Although Malaysia has had a subsidiary in Penang handling back-office operations, including finance, since 2017, it has not made any retail sales. That said, having agreed to set a presence in Malaysia, Tesla will be able to fill the gap between Singapore and Thailand with Superchargers.

That, in turn, would allow Tesla owners to drive from the southern tip of Peninsular Malaysia to Bangkok with assured recharging from Superchargers. Coincidentally, Porsche Asia Pacific has also almost completed its three-country network of charging stations. On top of that, Malaysia has recently extended its import duty and excise duty exemption for fully-imported (CBU) EVs for yet another year until December 31, 2025.

The Malaysian government is also providing manufacturers of EV charging equipment with 100% income tax exemption from the year of assessment 2023 to 2032. Those manufacturers will also be offered a 100% investment tax allowance for five years.

Affordability remains a hurdle

Yet, of all the challenges in the vehicle electrification process for Malaysia, the question would be: does the industry have the right affordable EVs for mass adoption? No doubt, a full tax exemption on EVs is a great way to spur demand, but the supply of affordable EVs is still an issue. Considering how EVs are generally expensive to produce in the first place and global shortages are making it impractical for companies to sell cheaper products in the market.

Take Tesla, for instance. Even if its most affordable range makes it into Malaysia, it could cost between RM250,000 to RM330,000–a far cry from what the Malaysian middle-class population would deem affordable. While Tesla has recently started sharing intentions to cut assembly costs by half in future generations of cars, chief executive officer Elon Musk has yet to unveil when the company would debut a much-awaited affordable electric vehicle.

For Malaysia, the hype of having the EV giant in Malaysia may be short-lived, considering it will only be addressing a niche market rather than the mass. Until then, the country would need more EV players to make their foray into the country to create a more competitive market and provide users with more affordable options. 

The post As Tesla gets the green light in Malaysia, is the country ready for it? appeared first on TechWire Asia.

More than any other nation, the US knows that the road to less reliance on China is a long and winding one. Of course, the right trade and industrial policies will help ensure that Washington, rather than Beijing, has its hands on the wheel. However, while we have seen the US try to stop depending on China “for the materials that power the products of today and tomorrow,” as President Joe Biden puts it, it’s apparent that their effort has not been entirely successful.

China holds the lion’s share of the electric vehicle industry. The US is far behind: in 2022, America passed the threshold of EVs accounting for 5% of new car sales — China passed that level in 2018. An analysis by BloombergNEF found that China holds an ever-growing portion of the global EV market. China’s global passenger EV sales share has gone from 26% in 2015 to 48% in 2021. It’s up to 56% in the first half of 2022, meaning it may hit 60% by the end of the year.

Last month, the China Passenger Car Association revealed that the country sold 5.67 million electric vehicles and plug-in hybrids in 2022. Of the new-energy vehicles that were sold, more than four million were all-electric vehicles, as state subsidies and high oil prices encouraged consumers to switch to greener models. In China, sales of new-energy vehicles were five times higher than in the US, cementing China at the top of the EV market.

What sets China apart from the rest, in EVs and batteries?

Despite the vast media hype in North America, only 31.6% of Tesla — America’s trophy child in the EV industry — sales occur on the continent. The EV market is predominantly distributed across China and Europe, and there are many factors contributing to why the US is falling behind. 

For starters, the US has been and is still grappling with dependence on battery materials processed overseas, especially in China. Chinese companies today control 80% of all critical minerals, including  80% of the world’s cobalt refining capacity, 82% of the world’s graphite production, and 93% of global manganese refining. Perhaps it is not a surprise that China has more than three-quarters of the world’s manufacturing capacity for EV batteries, and a single Chinese company, CATL, controls one-third of the entire global battery market.  

For carmakers in the US, it’s not as simple as ditching Chinese suppliers; matching their low prices is a task on its own. Initially, carmakers welcomed the new laws but gradually companies and their trade groups have begun pushing for a loosening of the rules around what counts as a Chinese-owned company. Some have advocated for a small amount of Chinese material to continue being allowed.

Many are making the change from Chinese suppliers to ensure they don’t lose customers to other companies who can sell US-made cars for US$7,500 less under new government rules. President Biden passed the Inflation Reduction Act to provide tax credit incentives for the sale of EVs manufactured in the US. As well as countering China’s rise in the industry, the move hopes to help meet the 2050 net-zero emissions target. The IRA includes requirements that all electric vehicles are assembled in the US.

Only vehicles with at least 50% of their battery components coming from the US (or countries with a free-trade agreement with the US) will be eligible for the full US$7,500 tax credit. The motivation of the Biden administration is clear; the nation has long been seeking to take advantage of the natural resources available on its borders. 

These caveats are undoubtedly aimed at driving investment in US raw material mining and battery production since legacy carmakers are actively following the market and expanding their EV production. However, industry experts indicate that the tax credit is unlikely to entice the more established companies, such as Tesla, who invested early in creating longer-term arrangements with Chinese-owned battery suppliers.

“Biden’s new US EV tax credit is too little too late when it comes to dominating the EV market,” GlobalData blatantly stated last year. The data and analytics company highlighted that China has a ten-year advantage in the electrification race, with the country set to constitute 60% of the global EV fleet by 2030 due to its dominant control over 70% of the global battery production supply chain.

All of this plays out against historical US-China tensions. Billy Wu, a battery engineer and senior lecturer at Imperial College London, the US policymakers are starting to realize when it comes to batteries, told Grid that “if you have no native producers, then you will ultimately be at the whim of China.”

Overall, the US federal push to keep battery production domestic is part of a broader reckoning about China’s ascendance. Still, experts say the US is unlikely to scale battery production fast enough to reach its high electric vehicle targets. Benchmark Mineral Intelligence forecasts that by 2025 the US’ share of battery manufacturing will rise, but only slightly — from 8 to 9%.

For now, it will take a long time for the US to catch up with China, which is about a decade ahead in the global EV race. With electric car sales in China and the US expected to keep rising and raw material supplies tightening, it remains to be seen whether either side will leverage its advantage in future trade disputes.

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Technology has played a crucial role in developing a consumer in each generation. From the invention of the printing press in the Renaissance to the widespread use of cell phones in the 21st century, technology has changed how people live and engage with the world.

For baby boomers, technology was a tool that altered the workplace. Computers and other forms of automation made it possible for businesses to run more effectively and efficiently, stimulating the economy.

Gen Z and Millennials have grown up with access to technology. Social media and smartphones have revolutionized how individuals interact with one another and access information. They have also created new opportunities for content creation and sharing.

Technology will continue to be essential for a consumer in the future.

Technology is skyrocketing. IDC predicts that by 2027, blockchain technology will become widely mainstream, affecting over 70% of everyday consumer activities, including gaming, content creation, and e-commerce and determining the functional expectations of consumers. IDC released its most recent research, IDC FutureScape: Worldwide Future Consumer 2023 Projections – Asia/Pacific excluding Japan (APeJ) Implications, which includes several predictions.

The pandemic lockdowns restricted how much money people could spend on in-person entertainment, travel, dining, transportation, and other expenses. Instead, gaming, streaming, and content creation boomed, highlighting the stark differences between various generational groups.

According to Seng Keong Low, Research Director, Digital Native Business, IDC Asia/Pacific, the future customer was created due to pandemic-driven behavioral shifts and the mainstreaming of Gen Z and Millennials’ distinctive behaviors.

“Understanding the distinct habits of generational cohorts, building relationships with these younger consumers, and developing offerings that resonate with them will be key for a successful consumer business,” Seng added.

IDC’s top 10 future consumer prediction.

The future of consumers is likely to be defined by several trends and factors. IDC has listed its top ten future consumer forecasts to determine the most significant trends and associated areas of potential in APeJ as follows:

1 Privacy influences brand selection: By 2025, one-fourth of Asia-based consumers will reject businesses based on how clear and comprehensive their privacy policies are, driving companies to switch to a permission-based strategy.

Consumers care about how their personal data is being used. For example, users may not shop on apps that continue to bombard them with suggestions on specific products.

2 Device-as-a-service gains momentum: By the end of 2025, more than 10% of consumers globally with Asian roots will have started adopting device-as-a-service subscriptions rather than outright purchases for their personal electronics and smart home needs.

3. Independent content creation produces opportunity: By 2026, Asian consumers will spend more than US$ 20 billion on online independent content creator content, upending the dominance of traditional media organizations.

4. Blockchain thrives and defines consumer expectations: By 2027, blockchain technology will become mainstream, affecting over 70% of typical consumer activities, including gaming, content creation, and eCommerce. This will define what consumers expect from these activities in terms of functionality.

One example of how blockchain is flourishing in the APAC region is through the use of decentralized finance (DeFi) platforms. DeFi platforms, which provide lower fees and quicker transaction times than traditional financial institutions, have become widely used in Singapore and China.

5. Shopping through voice: By 2023, up to US$ 30 billion more will be spent online in Asia, as more than 40% of smart assistant (SA) users utilize voice platforms to shop or make purchases.

6. Development towards the metaverse: By 2028, 5% of the top 1,000 Asian institutions will be managing a long-term, extensive digital twin (DT) project to benefit students, academics, and regional economic interests.

The Hong Kong University of Science and Technology (HKUST) is one example of this. The university plans to usher in the next digital era by creating the first physical-digital twin campuses in the metaverse to improve teaching and learning opportunities for its two campuses in Hong Kong and Guangzhou.

7. Off-premises dining thrives: By 2025, younger consumers will contribute to 65% of restaurant orders being for takeaway (delivery, pickup, or drive-thru), increasing the expansion of kitchen-only establishments and third-party food ordering applications.

8. Electric vehicle adoption reaches a tipping point: By 2025, electric vehicles (EVs) will quadruple their share of new consumer vehicle registrations, reaching 10%, speeding mainstream acceptance, reshaping ridesharing, and influencing public policy.

EVs are becoming more prevalent on Malaysian roads. High-end electric vehicles (EVs) from Porsche, BMW, Hyundai, Volvo, and Mercedes-Benz are now popular in Malaysia; presently, Tesla, MG, and Audi have also entered the market.

9. Payment wallets become mainstream: By 2027, more than 60% of urban transport users will incorporate mobility services into their digital payment wallets, enticing previously sceptical consumers to use the technology.

When it comes to online payments, Asia was the first region in the world where the use of e-wallets took off. With many e-wallet providers in the region, super apps like WeChat or Alipay in China, Grab in Singapore, Gojek in Indonesia, KakaoTalk in South Korea, and many others are the dominant forces.

10. Smart Sets drive content: By 2027, 30% of buyers of consumer flagship phones will utilize a Smart Set (a smartphone, watch, and earwear) for entertainment and navigation, motivating major brands to create content specifically for Smart Sets.

Blockchain technology to thrive, but what will it mean to IBM and MAERSK?

As mentioned above, IDC predicted that blockchain will thrive. However, Maersk (Maersk) and IBM recently decided to withdraw the TradeLens offerings and discontinue the platform.

IBM and Maersk are known for setting the benchmark for blockchain use cases. With its blockchain project, called TradeLens, it has demonstrated the potential of the technology to transform the global supply chain industry. TradeLens is a platform that uses blockchain technology to track and document the movement of goods across the supply chain from the point of origin to the point of destination.

The platform will shut down by the end of the first quarter of 2023. All stakeholders will ensure that clients are cared for during this procedure without disrupting their enterprises. Maersk will keep working on automating the supply chain and boosting industry innovation to decrease trade friction and encourage greater international trade.

“TradeLens was founded on the bold vision to make a leap in global supply chain digitization as an open and neutral industry platform. Unfortunately, while we successfully developed a viable platform, the need for full global industry collaboration has not been achieved. As a result, TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business,” said Rotem Hershko, Head of Business Platforms at A.P. Moller – Maersk.

Technology has significantly impacted society in every generation, influencing how people live, work, and learn. Future generations will likely be substantially influenced by technology as it advances.

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