On the busy streets of Asia, a quiet revolution is underway as electric vehicles (EVs) take centre stage in the region's automotive landscape.

By 2040, a staggering 54 per cent of new car sales and 33 per cent of global car fleets are projected to be electric, marking a pivotal moment in the automotive industry. Dynamic Asia is not just participating in this race, it is setting the pace for the rest of the world.

Asia in the fast lane

Asia's EV market, led by China and ASEAN’s green ambitions, showcases rapid adoption fuelled by comprehensive government policies, extensive manufacturing capabilities, and an expanding infrastructure.

China, the world's EV leader, exemplifies this surge with its mix of incentives, manufacturing quotas, and an ever-growing network of charging stations.

By 2035, total EV sales in the ASEAN-6 countries (Indonesia, Malaysia, Thailand, Vietnam, the Philippines and Singapore) is forecast to reach 8.5 million units, covering passenger vehicles, commercial vehicles and two- and three-wheelers.

Within ASEAN, Indonesia and Thailand are leading the charge in EV sales by leveraging natural resources and strategic investments, setting ambitious targets for EV production and infrastructure development.

Figure 1: Indonesia and Thailand are at the forefront of EV sales within ASEAN

Indonesia, rich in nickel – crucial for EV batteries – as well as tin and copper, is heavily investing to become a global EV manufacturing hub. Since the 2020 nickel export ban, major companies have ramped up investments in Indonesia.

Thailand, with an established automotive industry, is looking to carve a niche in the EV landscape. In July, China’s BYD launched its first EV factory in Southeast Asia in Rayong, Thailand, which will have an annual production capacity of 150,000 vehicles. The kingdom’s Board of Investment (BOI) also introduced a new investment category for service centres focused on the repacking, and reuse of used EV batteries. This supports Thailand’s 30@30 target, aiming for EVs to make up 30 per cent of total vehicle production by 2030.

Major automakers like Toyota, Honda, Isuzu and Mitsubishi, are set to inject around 150 billion baht (US$4.3 billion) in the next four years for EV manufacturing, boosting total investments in the sector to over 227 billion baht (US$6.6 billion) from domestic and international sources.

Europe's regulatory roadmap and America's progress

Europe's EV journey is characterised by stringent regulatory frameworks, substantial incentives, and a strong commitment to sustainability.

Norway leads global EV adoption for the third consecutive year, thanks to its abundant hydropower resources that support a reliable and extensive charging grid.

Together with the Netherlands, the Scandinavian countries have achieved remarkable market penetration through aggressive carbon dioxide (CO₂) emission reductions, purchase subsidies, and a dense charging network. This cohesive strategy underscores Europe’s position as a mature EV market with a clear vision for the future.

Figure 2: Norway and the Netherlands excel in EV readiness in Europe. Source: Ayvens

Across the Atlantic, the United States (US) presents a more nuanced picture of EV adoption. States like California lead with progressive policies and incentives, but the changing federal approach has created challenges in reaching the goal of 50 per cent new EV sales by 2030.

Figure 3: California leads in EV adoption, with other states working to catch up. Source: Finn

To bridge this gap, the US is investing US$7.5 billion in infrastructure development and exploring renewed federal incentives to drive a nationwide shift towards electric mobility.

This mixed approach highlights the diverse challenges and opportunities the US faces in enhancing its EV market and infrastructure.

Steering EV growth through incentives and infrastructure

In Asia, government intervention is pivotal, with China and ASEAN nations deploying a mix of subsidies, tax breaks, and direct investments to boost EV and battery manufacturing activity.

Figure 4: Incentives driving EV adoption

While strides are being made at the national level, regional cooperation is vital in diverse ASEAN. ASEAN leaders are united in their commitment to developing a cohesive regional EV ecosystem, aiming to enhance the integration efforts of the ASEAN Economic Community.

This proactive stance not only boosts local industries but also solidifies ASEAN’s position as a rising EV powerhouse.

Charging towards a sustainable horizon

The global shift towards electric vehicles is a multifaceted journey, shaped by regional policies, market readiness, and technological innovation.

Asia's accelerated push, Europe's regulatory clarity, and America's dynamic landscape illustrate the diverse paths towards achieving electric mobility.

Each region's experience offers valuable insights into the collective efforts to reduce carbon emissions and foster a cleaner, greener future.

Asian consumers are rapidly warming up to EVs, motivated by government incentives, environmental consciousness, and an expanding range of affordable options. However, success within the region demands a deep understanding of local markets and their intricacies.

As nations navigate the challenges and opportunities of EV adoption, sustainability emerges as a shared global mission. Collaboration and innovation in policy and technology will drive the electric revolution forward.

Through tailored, sustainable financing initiatives, UOB supports businesses in ASEAN and Greater China to seize opportunities and chart a course towards a more sustainable future.

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