New EV showrooms have sprung up in the economic capital of Yangon. Some sell Chinese brands such as leader BYD, though others are empty except for signs that simply say “EV.”

Ushering in this change is a provision that went into effect on Feb. 1 that added a requirement to have a showroom when importing EVs.

About 85 companies now hold licenses for EV-related businesses, according to the regime’s steering committee on national EV development. Showrooms without brand names represent operators preparing to enter the EV industry.

The authority aims to expand the EV market through competition as it seeks to limit costly gasoline imports. The regime banned imports of gas-powered cars in 2022 as part of efforts to shore up dwindling foreign currency reserves.

Import tariffs for EVs were scrapped in January last year, which is due to continue until this March. More than 2,200 EVs had been registered as of Jan. 31, according to the Ministry of Transport and Communications.

The number of registered EVs jumped 6.5 times from a year earlier. Roughly 1,900 EVs were registered in the year through January alone.

One man, who works in a town 200 kilometers away from Yangon, drives an EV made by Neta, an affiliate of the Chinese maker Hozon New Energy Automobile.

“I save on gasoline, and it rides comfortably,” said the man.

Gas prices in Myanmar have rocketed to historic highs due to fuel imports and distribution being disrupted by the shortage of foreign currencies. The cost to drive a Neta for 100 kilometers is 80% less than the cost to drive a minivan with a 1.5-liter engine over the same distance.

Local dealer Grand Sirius distributes the Neta. On the low end, the Neta V sells for 77 million kyat ($36,700), while the Neta U Pro is 50% more expensive. Roughly 200 Netas from both series have been sold since the brand fully entered the market last year.

MG, an affiliate of Shanghai-based SAIC Motor, has showcased EVs in shopping malls and elsewhere to build brand awareness. Leapmotor, the Chinese EV maker backed by the Euro-American auto group Stellantis, has adopted that approach as well.

MG has sold roughly 300 vehicles so far, with about 100 additional preorders, according to NPK Motors, which distributes both MG and Leapmotor vehicles.

Toyota Motor’s strategic model bZ4X could be seen in Yangon as well. A closer look reveals that these vehicles were manufactured in China by a joint venture. Toyota itself is not involved in imports into Myanmar.

Essential Motors, which imports and distributes BYD cars, is preparing to build an assembly plant. It is on track to acquire land and a permit for the project, and discussions are ongoing with BYD and other stakeholders, according to the businessperson behind the venture.

Myanmar’s EV market is suddenly heating up, and Chinese brands are taking a dominant share. This appears to be less because of the cozy political relationship between the countries and more because Myanmar is a destination for the overflow of Chinese EVs — a sector facing excess production.

Among the factors explaining the draw of EVs to Myanmar consumers, the vehicles can be relatively cheap to purchase.

Leapmotor’s T03 is priced at around $26,000. A used Suzuki Motor Ertiga minivan that is locally manufactured and still in good condition would cost about $33,000.

Myanmar’s military regime has banned imports of gasoline-fueled cars for more than two years, and also restricted foreign-currency transactions by local manufacturers, in the name of improving the country’s trade balance and saving on foreign currency.

Such measures have hindered imports of auto parts, limiting operations at plants run by automakers such as Suzuki and Toyota and contributing to a supply shortage that has driven up prices.

The lack of an “old guard” of automakers built around cars with internal combustion engines is another key point.

Most vehicles in Myanmar are used autos imported from other markets. The industry has been at the mercy of import curbs since the days of the previous military regime that preceded the 2011 transition to civilian rule, hindering the growth of a broad industrial base spanning from parts production to car assembly.

The 2021 takeover has compounded this. Myanmar produced just 1,475 vehicles last year, with three months of output in the single digits, data from the ASEAN Automotive Federation shows.

Meanwhile, worry about running out of charge is less of a psychological barrier for drivers in a country where power outages are commonplace.

“As long as I make good use of my work and home chargers together, since there’s not much traffic, I don’t worry about running out of power,” a Neta driver said.

Auto adoption has been relatively slow among Myanmar’s population of 50 million, and the market still has abundant room to grow. The EV trend illustrates one scenario for their spread in a politically unstable frontier economy.