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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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The Electric Vehicle Market In Asia Is Booming

  • China still dominates the Asian electric vehicle market, but other countries in the region are also seeing impressive growth in both consumer markets and manufacturing.
  • The EV markets in Indonesia, Thailand, Singapore, and India are all growing fast, and that growth is only projected to accelerate in the coming decade.
  • India is arguably the country in the world with the most potential for growth in its EV market, as its population of 1.4 billion largely uses cars in urban and suburban areas.
Electric Vehicle

Until now, China has dominated the Asian electric vehicle (EV) market but there are some other fast-growing EV markets now emerging across the region. Several Asian countries are beginning to develop their EV consumer markets and manufacturing capabilities in line with the shift to green. Over the next decade, we can expect EV markets in Indonesia, Thailand, and India to expand significantly as demand for non-fossil fuel-powered vehicles continues to grow. 

Passenger EV sales in Southeast Asia increased by 35% year on year in quarter three of 2022, with Thailand registering the highest EV sales volume. This was followed by Indonesia and Singapore. Battery EVs held a 61% share of these sales, with hybrid EVs making up the rest. EVs accounted for 2% of the total new car sales across the region. 

Indonesia is the largest economy in Southeast Asia, and it is steadily developing its EV production capabilities in line with increasing demand. The government hopes to be producing 13 million electric motorcycles and 2.2 million electric cars by the end of the decade. This is supported by the country’s well-established metals and minerals industry, with huge nickel reserves – around 52% of the global total. Nickel, alongside other metals and minerals, is a vital component of EV battery production and sourcing it locally can help cut manufacturing costs. 

Indonesia aims to achieve net-zero carbon emissions by 2060, supported by the electrification of its transportation sector. Its transport accounts for around 40% of the country’s total energy consumption, as well as contributes 13% of Indonesia’s air pollution. The government included the shift to EVs in its National Masterplan for Industry (RIPIN) 2015-2035 and EV production has been steadily increasing ever since. Under its National Medium-Term Plan 2020-2024, the state also plans to develop the supporting infrastructure required for the rollout of EVs across the country.

Meanwhile, in Thailand, another Southeast Asian economic giant, the government’s subsidy policies are helping to rapidly grow the country’s EV market. In addition, several Chinese companies are looking to launch production activities in Thailand, including Great Wall Motor (GWM), SAIC Motor, and BYD. The Thai government offers subsidies of between $2,000 and $4,350 for qualifying EVs, as well as tariff and sales tax reductions, to encourage the uptake of EVs. In the first two months of the year, a study showed that battery EVs accounted for 6.2% of all new car sales. At present, the top-selling EV models come from Chinese automakers, offering consumers cheaper alternatives to European and North American competitors. 

And now auto giants are looking to India to develop their EV markets, following significant growth in recent years and a strong willingness from the government to undergo a green transition. It’s no wonder that automakers are hoping to reach the Indian consumer market with a population of over 1.4 billion. In addition, India is set to be the second-fastest growing economy in the G20 in the financial year 2022 to 2023. However, India has fallen behind the world’s major EV markets, including China, the U.S., and Europe.

The International Energy Agency’s Global EV Outlook 2023 stated that India’s EV sales hit almost 50,000 in 2022, a fourfold increase from the previous year. But this is still far below China’s EV sales of 4.4 million. This suggests there is significant potential to grow the Indian EV consumer market in line with the steady development of the country’s EV and component manufacturing industries. The Indian government is offering a $3.2 billion incentive program, which has attracted $8.2 billion investment, to help develop the country’s EV market. 

Several major automakers have taken notice of India’s EV potential. For example, the CEO of Citroën, Thierry Koskas, stated that although the Indian EV market is “just starting”, the company has “great hope for this market because a lot of car usage in India is urban or suburban, and that can be absolutely perfect for electric vehicles.” Citroën India launched its fully electric ë-C3 in February 2023, as several other major automakers also enter the Indian market, including Volvo and Audi. 

Several Indian companies are also looking to solidify their position in the market, including Mahindra and Mahindra and Ola Electric. Ola’s CEO, Bhavish Aggarwal, said that the company plans to launch an all-electric vehicle that can go from zero to 100 kph in four seconds by 2024. Although, despite the strong potential for EV manufacturing and sales, the government will have to rapidly develop the country’s EV infrastructure to encourage uptake. 

While China still dominates the Asian – and world – EV production and sales markets, there is optimism around the rapid growth of other regional EV markets. Indonesia and India show significant potential for EV manufacturing, while Thailand and India could develop huge consumer markets. With greater foreign investment and support from government policies, several countries in Asia could quickly rise to compete with North American and European EV markets. 

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By Felicity Bradstock for Oilprice.com

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