EV adoption is increasing in Thailand, Vietnam and Indonesia, reshaping the automotive industry while placing additional pressure on underdeveloped power grids.

Thailand currently leads the region with government targets that include 30% zero-emission vehicle production by 2030 and a significant presence of Chinese automakers, although grid capacity continues to lag behind rising demand.

Electric vehicle sales across Southeast Asia are rising steadily. Thailand has expanded EV manufacturing capacity, Vietnam has developed a domestic EV brand with international operations, and Indonesia is positioning its mineral resources to support the global battery supply chain.

However, findings from the International Energy Agency, research firms and regional reporting indicate that the electrical grids required to support large-scale EV adoption are not developing at the same pace as vehicle deployment.

Thailand expands EV production amid grid concerns

Thailand has become a regional centre for EV manufacturing and sales, supported by a government target of achieving 30% zero-emission vehicle production by 2030. Chinese automakers, including BYD, have expanded their presence in the Thai market with competitively priced models, contributing to increased consumer adoption.

Concerns remain regarding the impact of large-scale EV charging demand on urban electricity networks, particularly in cities where peak power demand is already increasing. The International Energy Agency has noted that EV adoption across Southeast Asia is concentrated primarily in densely populated urban centres, where grid systems are already under strain. Although Thailand has increased infrastructure investment, grid expansion has not matched the pace of EV growth.

VinFast and Vietnam's grid challenges

VinFast continues to expand internationally despite recording financial losses, including a net loss of US$ 3.87 billion in 2025. At the same time, rising domestic EV adoption is increasing pressure on Vietnam's electricity infrastructure, which has faced recurring curtailment issues and payment disputes involving renewable energy developers.

In Vietnam, the EV sector is largely centred around VinFast, the automotive subsidiary of the country's largest private conglomerate, supported by founder Pham Nhat Vuong. In 2025, VinFast reported a net loss exceeding US$ 3.87 billion, while revenue rose to US$ 3.59 billion.

Although VinFast's domestic growth has been supported by government policy, concerns remain regarding the impact of increased EV adoption on the national grid. A recent analysis by a market analysis firm estimated that accelerated EV adoption could require grid investment levels up to 28% higher than current high-growth projections by 2030. This would represent a significant financial commitment for a country already dealing with recurring curtailment issues, in which power output is reduced to prevent grid overload.

Vietnam continues to experience periodic power supply disruptions during peak summer periods. In the industrialised northern regions, output reductions have exceeded 50% in some areas. These disruptions have affected manufacturers including Foxconn, LG, Samsung, Apple and Canon, with production impacted by power restrictions and outages.

Vietnam's state electricity distributor, Vietnam Electricity (EVN), has also faced criticism for failing to honour contracted feed-in tariff payments related to approximately 12 gigawatts of solar and wind capacity. More than 170 projects, most of them solar developments, reportedly face payment suspensions or tariff reductions of up to 43%. Some developers have raised the possibility of international arbitration proceedings, increasing concerns among foreign investors regarding regulatory reliability.

Indonesia focuses on batteries and infrastructure

Indonesia's EV strategy differs from those of neighbouring countries. Rather than relying primarily on domestic vehicle demand or a single manufacturer, the government has focused on the country's position in global nickel production, a key material used in EV batteries.

The strategy has attracted investment and increased Indonesia's role in discussions surrounding global battery supply chains. However, the charging infrastructure required to support widespread EV adoption domestically has faced delays linked to coordination issues between the state utility, Perusahaan Listrik Negara, and private charging operators. As a result, industrial development and infrastructure deployment have progressed at different rates.

Continued dependence on fossil fuels

Across Thailand, Vietnam and Indonesia, EV adoption remains closely tied to electricity grids that continue to rely heavily on coal-fired generation. While EVs are promoted as a means of reducing dependence on imported fossil fuels and lowering tailpipe emissions, much of the electricity used for charging continues to come from conventional energy sources.

As a result, the transition reduces reliance on imported oil but does not eliminate dependence on fossil fuels entirely. Instead, energy dependence shifts towards domestically generated coal-based electricity.

Although EVs operating on coal-heavy grids generally produce lower emissions than conventional petrol-powered vehicles, they are not carbon-neutral. This distinction remains relevant when evaluating decarbonisation targets and broader energy transition strategies. Greater transparency regarding the proportion of EV charging powered by fossil-fuel generation could provide a clearer assessment of environmental progress and policy effectiveness.

Grid pressure and emerging energy demand

Pressure on electricity grids linked to EV adoption is expected to increase gradually through transformer overloads, localised voltage instability, mounting curtailment and declining investor confidence in power infrastructure projects.

Regional studies of Southeast Asian electricity systems have identified transmission infrastructure that remains unevenly developed and prone to bottlenecks, reducing efficiency and slowing project integration across multiple markets. These issues are structural and are unlikely to be resolved solely through faster EV deployment.

Another emerging factor is the increase in electricity demand linked to artificial intelligence infrastructure and data centres. Power demand from data centres across ASEAN is projected to more than double by 2030, while some estimates indicate a fourfold increase to approximately 10.7 gigawatts by 2035. The expansion of EV infrastructure and AI-related facilities is therefore expected to place simultaneous pressure on existing grid systems.

Infrastructure and regulatory challenges

Southeast Asia's EV expansion is increasing pressure on electricity infrastructure, while challenges linked to grid reliability, coal dependence and rising electricity demand remain significant.

Addressing these issues will require grid modernisation, transparent regulatory frameworks capable of attracting long-term investment, and improved coordination between governments, utilities and private-sector participants. It will also require energy planning that treats grid development as a central component of transport electrification rather than a secondary consideration. The long-term expansion of EV adoption across Southeast Asia will depend in part on the pace of infrastructure development and the ability of regional electricity systems to support rising demand.