On a recent trip to China, I noticed an interesting trend – the proportion of electric vehicles being significantly higher than most other parts of the world. I understand that the EV penetration in China is as high as 20%. And that is a big number!

This got me thinking about why EVs are getting so popular in South and Southeast Asia; and why companies and governments are investing heavily to build the necessary infrastructure and promote the widespread adoption of EVs.

The EV battery market in the Indo-Pacific region is showing impressive growth potential and the region is fully embracing the electric revolution, driven by increasing environmental awareness, technological advancements, and supportive government policies.  My thinking is that one of the main factors driving the EV market in this region is the focus on infrastructure development. With demand being fuelled largely by considerations around cost and a sense of consciousness around environmental factors, this infrastructure focus has emerged as a key push factor.

Governments are taking proactive measures to set up charging stations, battery-swapping networks, and implementing policies to encourage people to adopt EVs. This push for infrastructure aims to overcome the common concerns of limited range and charging options that have held back the widespread acceptance of electric vehicles. Additionally, government initiatives and subsidies are attracting foreign investments, which contribute to the overall growth of the EV industry. For example, Indonesia offers enticing incentives to attract EV battery component producers, EV manufacturers, and EV buyers. The country is strategically leveraging its abundant nickel reserves and implementing targeted measures to attract foreign investment in nickel processing.

Both local and international companies are recognising the immense potential of the EV sector in South and Southeast Asia and making significant investments. Major automakers are entering the market by partnering with local manufacturers and establishing production facilities. The competition within the EV sector is evolving rapidly, with startups emerging and striving to make their mark in this transformative industry. These startups not only compete but also challenge established players in the automobile industry. This competition fosters innovation and drives the development of cutting-edge technologies, making EVs more efficient, affordable, and accessible for consumers.

One use case here that I see is from India, where a company called BluSmart is changing the rules in the ride-hailing industry by using an all-electric taxi fleet. BluSmart aims to attract passengers and drivers by offering a cleaner and more reliable service through direct fleet management. With plans to expand operations and increase its fleet size, this new entrant is capitalising on the growing demand for electric vehicles and the push for sustainability in transportation. Despite facing challenges from larger competitors, BluSmart is gaining market share and reshaping the industry.

Adapting to this trend, large global players such as Uber have also announced plans for all-new green fleets. Uber seems to be basing its growth strategy in the region on having a significant number of electric vehicles (EVs) in its fleet. Uber is emphasising the adoption of environmentally friendly vehicles and has extended partnerships to introduce 25,000 electric cars and 10,000 electric bikes onto its platform in India within the next two years.

Local manufacturing is also in emphasis in South and Southeast Asia. Governments are encouraging the establishment of local manufacturing facilities to reduce dependence on imports and stimulate economic growth. This approach strengthens the domestic industry, creates jobs, and contributes to developing a robust EV ecosystem of production and consumption. During my recent visit to China, a major player in the global EV market, I was thrilled to see that most vehicles on the road were new, and many were electric. China aims to capture 50% of the EV market share by 2035, which seems achievable even before the set deadline of 2030.

The main obstacle hindering the growth of the EV industry is the lack of charging infrastructure and a reliable electricity grid that isn’t dependent on fossil fuels. However, there is significant progress being made on all fronts. Quickly Google “Asia – EV market,” and you’ll find countless articles about the booming industry. The growth projections for the EV market in South and Southeast Asia are highly promising. The EV landscape in this region is undergoing a remarkable transformation. Seeing China’s success in the market was inspiring, and many other countries are on track to achieve a substantial EV market share and embrace a sustainable and electric future.

Now, as we witness the electrification of transportation and the rapid growth of the EV industry in South and Southeast Asia, a question arises: How will this shift to electric vehicles impact mobility in the region? How will it affect the overall sustainability and environment of the area?