The electric vehicle market is taking off in Southeast Asia as automakers plan to start production in at least three countries this year, a key step toward making cars more affordable for the region’s consumers.

Many of these companies are based in China and South Korea, while Japanese automakers—which now account for more than 90% of new-car sales in Southeast Asia—fall behind.

Just months after Hyundai Motor began full-scale production at its new electric vehicle factory in Indonesia, China’s SAIC-GM-Wuling Automobile unveiled a new mini EV slated to start production in the Southeast Asian country by the end of the year.

Wuling is a driving force in China’s growing EV market, selling 420,000 Hongguang Minis—which start at RMB 32,800 (USD 4,880)—there last year.

The company has yet to announce the price of its new model in Indonesia. But a similarly priced auto could ignite the EV market in that country, where the majority of models now cost over USD 35,000. Around 700 new EVs were sold in Indonesia last year.

Indonesia is tapping its rich mineral reserves to promote battery production and other EV-related businesses. Jakarta aims for EVs to make up 20% of all automobiles produced in the country in 2025, and is offering tax incentives for manufacturers to encourage new investments.

Thailand wants EVs to account for 30% of its auto production by 2030. On June 9, the country lowered taxes on EVs to 2% from 8% in exchange for promises to start local production in the future. The government also provides a subsidy of up to THB 150,000 (USD 4,240) per EV.

China’s Great Wall Motor responded by slashing the starting price of its Ora Good Cat by around 8%, to THB 763,000. The company has received bookings for over 4,700 Ora vehicles since they went on sale in Thailand in November, more than double the country’s entire EV sales in 2021. Great Wall looks to reduce prices further by starting Thai production as early as 2023.

Toyota Motor and SAIC Motor are also taking advantage of the Thai incentives. Toyota is expected to start selling Japanese-built EVs in Thailand later this year, with plans to switch to local production as early as 2024.

Mercedes-Benz Group plans to start assembling vehicles in Thailand this year, while Thai state energy group PTT aims to begin EV production in 2024 with Hon Hai Precision Industry, the Taiwanese manufacturer also known as Foxconn.

Volvo Cars announced in March that it had begun assembling vehicles in Malaysia. Fieldman Group, a Malaysian producer of palm oil and other commodities, said in January that it would build a joint EV assembly plant with China’s Changan Automobile.

VinFast, the automaking arm of Vietnamese conglomerate Vingroup, began selling locally made EVs in December. It plans to manufacture and sell vehicles in the U.S. as well.

In the Philippines, a law to bolster the EV sector took effect in May. It requires logistics providers and public transportation operators to electrify at least 5% of their fleets by a date to be decided later. The government is weighing new incentives for importing and manufacturing such vehicles.

But the region’s lack of charging networks inhibits the widespread adoption of EVs. Critics also say the vehicles will do little to curb carbon emissions in Southeast Asia since many countries rely heavily on fossil fuels for electricity.

Japanese automakers are focusing instead on plug-in hybrids in Southeast Asia. Meanwhile, Chinese and South Korean players are building charging infrastructure in the region to cultivate demand. As a result, Japan risks losing its grip on the Southeast Asian market, given forecasts that EVs could overtake gasoline-powered cars by sales in 2035.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.