Motormouth: The influx of Chinese EV brands into Singapore is a gold rush, but not everything that shines in the Sino-Sing motor trade is gold

[Image credit: Game Science]

There’s a strange mood prevailing in Singapore’s car industry today - obvious optimism mixed with unseen pessimism.

[Story by guest columnist Say Kwee Neng]

On the one hand, there’s gold rush fever amongst most of the players in the motor belt, with everyone hoping to strike it rich by bagging the distribution rights to a coveted Chinese EV brand.

On the other hand, there’s a strange, unspoken foreboding amongst these same automotive players, some of whom are already distributors of Chinese EV brands. 

Why? 

Five years ago, when I started engaging Chinese EV brands, the overriding sentiment was that the Chinese preferred to go it alone. That was before Covid tore the financial positions of many companies asunder. It was also just as the brutal price war erupted in the Chinese NEV (new energy vehicle) sector that has decimated even promising startup EV brands there. 

When funds started drying up, the mood suddenly shifted to one of partnership - a willingness to explore cooperation with local partners to help them alleviate the capital crunch that would have hamstrung their growth and development in the Asian region. 

Chinese EV brands' tie-ups with local distributors were never meant to be a “till death do us part” arrangement. Many of the Chinese EV brands I know aim to import and distribute their products themselves eventually. It's never spoken, of course, but it's there. 

The reasons are purely financial. Every Chinese EV brand aims to recover as much of the operating margins from their businesses as possible. Vertical integration is how they hope to achieve this. BYD is the poster child of this strategy. 

BYD’s announcement in May 2025 that it will take back the distribution rights to Australia from its initial business partner there came at almost the same time as news of Xpeng considering the same moves Down Under. These are seen as logical steps to achieving ultimate vertical integration. 

Another fallout from the ongoing EV price war in China is the inevitable consolidation of many Chinese EV brands. Some of the EV brands in Singapore today may not even be around in the next decade. 

These uncertainties will see more rounds of musical chairs to be played out with dealer groups before some stability sets in. This is why “brand shopping” to build up an EV portfolio today might be a futile exercise for any local motor trader. Distribution agreements signed with Chinese EV manufacturers today will likely be subject to change in the not-too-distant future. 

How do companies invest in building new EV brands from China, without the assurance that they will have an exclusive runway long enough to earn a decent return on their investments? 

The EV revolution will bring the best of times to Singapore's car industry, and possibly its most challenging as well.

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