An analysis by a market research firm has found that China and Thailand are reshaping the global auto industry through policies that expand electric vehicle (EV) adoption in their domestic markets.

On July 26th, local time, EV publication CleanTechnica reported that China is linking domestic electrification with export competitiveness, while Thailand is following the same model and expanding its role as an EV export base for Southeast Asia.

The key factor is the pace of domestic electrification rather than export performance alone. China's latest new energy vehicle (NEV) plan calls for NEVs to account for 30% of all vehicles in operation by 2030, rather than 30% of new-car sales. That would increase the number of NEVs on Chinese roads to more than 100 million. China's 15th five-year plan also calls for expanding NEV supply, while Hainan province has become the first region to confirm a ban on the sale of new internal combustion engine vehicles from 2030.

Beyond addressing climate change, these policies are also strengthening China's production scale, learning effects and supply-chain depth. As a result, China has become the world's largest auto exporter, with EVs accounting for a rapidly growing share of exports.

The figures reflect this trend. In the first half of 2026, EV and plug-in vehicle exports rose by about 120%, accounting for 46% of total auto exports. Over the same period, domestic auto sales fell by 21%, while exports increased by 65%.

Thailand is following a similar approach. The country's EV market has changed rapidly as Chinese companies, including BYD, expanded into Thailand. BYD leads local EV sales and is also building production capacity in the Rayong area. Thailand has shifted its incentive system towards export compensation to address domestic oversupply while expanding its role as an EV export base for ASEAN and other markets.

By contrast, Japan and the United States have been criticised for their slower transition towards domestic electrification. Hybrid and internal combustion engine vehicles continue to account for a large share of both markets, while the shift to fully electric vehicles remains gradual. Germany and South Korea fall between these markets, although both are showing signs of improvement. The European Union has introduced carbon dioxide regulations and a phased transition schedule, yet battery electric vehicles (BEVs) accounted for 21% of registrations in the first half of 2026, compared with 37% for hybrids and 10% for plug-in hybrids (PHEVs), indicating continued reliance on hybrid vehicles.

The analysis suggests these differences could widen future gaps in export competitiveness. In China and Thailand, factory conversion, research and development, supply chains and workforce retraining are advancing simultaneously. By contrast, critics argue that established automotive markets delaying the domestic transition risk losing export competitiveness during the 2030s.

It also noted that long vehicle replacement cycles do not necessarily mean market penetration will remain slow. Norway's experience suggests that when policy, charging infrastructure and consumer behaviour align, the transition can accelerate more quickly than expected. In addition, households owning both EVs and internal combustion engine vehicles tend to use EVs more frequently, indicating that changes in actual demand could outpace registration figures.

Pressure is also emerging in Europe. In June 2026, Chinese brands' market share in Europe rose to 11%, about double the figure recorded a year earlier. This is seen as an indication of what could happen when markets that delay domestic electrification compete with manufacturers that have already completed the transition.

Ultimately, the future ranking of global auto production is likely to depend on how quickly the share of new fully electric vehicle registrations increases in exporters' home markets. China and Thailand are already following that path, while Europe remains in the middle. Whether Japan and the United States can maintain an incremental, hybrid-focused strategy remains a key issue to watch.