How Iran’s energy crisis is accelerating Southeast Asia’s EV transition

(SeaPRwire) –   As the energy crisis in Iran enters its eighth week, drivers in Southeast Asia are feeling the strain. Throughout the region, fuel costs have surged, leading to lengthy queues at gas stations in Thailand, Vietnam, and the Philippines as motorists attempt to refuel.

Although oil prices have retreated from their recent peaks—with West Texas Intermediate crude trading near $90 per barrel—costs remain significantly elevated compared to pre-conflict levels. Petrol supplies in Asia have been disrupted by the closure of the Strait of Hormuz and export restrictions on refined fuel from nations such as China and South Korea.

However, motorists throughout the region may have discovered a solution: electric vehicles.

At the Bangkok Auto Show in early April, Chinese EV leader BYD secured more orders than any other car manufacturer, surpassing Toyota for the first time. Seven of the top ten brands were Chinese.

According to Samuel Chng, a research assistant professor at the Singapore University of Technology and Design (SUTD), concerns over energy security are driving demand for EVs. “EVs are increasingly viewed not merely as a solution for climate change, but as a method to lessen reliance on imported energy.”

Data from the U.S. Environmental Protection Agency shows that EVs transform approximately 90% of stored energy into motion. In contrast, traditional gasoline engines only convert about 25% of fuel energy into movement. This efficiency makes EVs a cost-effective and appealing choice for consumers during times of energy shortage.

“The energy squeeze is doing far more to speed up the shift to EVs than any climate change narrative,” stated Lawrence Loh, director of the Center for Governance and Sustainability at the National University of Singapore (NUS). “In the end, it comes down to financial impact—and the conflict in Iran affects your finances immediately.”

Benchmark Mineral Intelligence reports that 1.75 million EVs were sold globally in March, representing a 66% increase from the previous month.

The EV Surge in Asia

Chinese automobile manufacturers are reshaping the global automotive sector with their affordable yet innovative electric vehicles. The Washington-based-based Center for Strategic and International Studies estimates that Beijing has injected over $230 billion into its EV sector since 2009, covering infrastructure subsidies, sales tax exemptions, and research and development. This investment has fueled intense domestic rivalry among companies like BYD, Xpeng, and Nio.

“This fierce competition has spurred innovation, reduced battery costs, and driven prices down, thereby increasing EV accessibility and boosting exports,” explained Chan Siew Hwa, codirector of the Energy Research Institute at Nanyang Technological University in Singapore. (A BYD vehicle can be up to $20,000 cheaper than a Tesla.)

To remain competitive in their domestic market, Chinese EV producers are enhancing the driver experience by integrating features such as assisted driving and assistants powered by Large Language Models (LLMs). These manufacturers are now introducing these features to international markets as well: recently, BYD expanded its collaboration with U.S. software company Cerence AI to launch an in-car conversational LLM assistant using Cerence’s platform.

“Asian EV manufacturers attract buyers by providing more features for the same price,” noted Kim Jeong Won, a senior fellow at the Energy Studies Institute at NUS.

By forming alliances with local conglomerates and automotive groups, companies are gaining ground in Southeast Asia. Sime Darby, ranked No. 22 on the Southeast Asia 500, serves as BYD’s official distributor in Malaysia and Singapore, while Ayala’s subsidiary ACMobility handles sales in the Philippines.

Local EV manufacturers are also reaping the benefits. Last year, VinFast sold slightly more than 175,000 EVs in its domestic market, doubling its 2024 numbers. According to energy think tank Ember, EVs now account for nearly 40% of car sales in Vietnam, exceeding the European average.

In Singapore, government initiatives are driving EV uptake. The country prolonged EV subsidies in 2025 while eliminating them for hybrid vehicles. Additionally, Singapore has decreed that all new cars registered from 2030 must utilize cleaner energy sources, such as electric, hybrid, or hydrogen, and has pledged to establish a fast-charging EV hub in every residential neighborhood by 2027.

While optimism for EVs prevails in Southeast Asia, adoption has been slower in parts of East Asia. “Although EVs have become mainstream in China, consumers in Japan and South Korea remain hesitant about fully electric vehicles and prefer hybrids,” Kim explains.

Not a Complete Solution

Experts warn that EVs will not completely resolve issues issues related to the green transition and energy security. “The net climate advantage of EVs relies on the cleanliness of the national electricity grid,” stated Chan of NTU. “Otherwise, pollution is merely shifted upstream.” (Southeast Asia continues to depend heavily on fossil fuels like coal for electricity.)

Li Shengxiao, an urban planning specialist from NUS, highlights that EVs carry concealed environmental and economic costs over their lifespan. For instance, their lithium-ion batteries cannot be disposed of in landfills due to their tendency to overheat and ignite. Furthermore, maintaining and recycling EVs presents challenges.

“When considering life cycle costs—which encompass all factors from purchase to the disposal, including insurance and durability—EVs may ultimately prove more expensive per mile than gasoline cars,” said Li.