Leaping into Pole Position: How Asia Pacific is shaking up the EV industry
The route towards a fully electric fleet need not be a gordian knot for nations across the APAC region.
What an exciting time for e-mobility! Having celebrated World Environment Day this month, I wanted to reflect on how far nations across the region have come, and how we can do better in our journey towards transitioning to a fully electric fleet to create a healthier ecosystem.
Thailand recently announced a bold plan for all cars sold in the country to be electric by 2035. The country is not alone in its ambition, with other markets across APAC, such as Singapore, China and Japan, announcing similar targets in recent times. As electric vehicle (EV) technology makes swift advances, the potential social, environmental, and economic benefits of EVs are now clearly apparent, giving countries in the region the final push to charge full speed ahead towards an electrified transport network.
Playing catch-up: Is APAC too late to the game?
APAC is now at the precipice of an EV revolution. Yet, by most estimates, the region is around 3 to 4 years behind Europe in EV adoption. As APAC joins the race towards transitioning to a full electric fleet, it has a rare opportunity to turn this lag into an advantage.
The region is a blank canvas, making it an ideal ground for rapid adoption and innovation. EV technology has evolved quickly over the years. For instance, while Europe started out with 50kW chargers that took 45 minutes, today EV charging can be as quick as 15-20 minutes. By leapfrogging over some of that technology, APAC is fast tracking its way towards mainstream EV adoption and growing into the next possible global leader for e-mobility. In fact, industry research predicts that APAC will show the highest EV growth, with countries like China already making great strides.
Yet, while APAC has the privilege of drawing on learnings from first movers, there is no one-size-fits-all solution. Rather, countries that are seeing excellent growth in EVs are the ones who have been able to map out a strategic approach whilst adapting and innovating, according to their unique local competencies and cultural contexts.
Getting around entry barriers with a different starting point
EVs still come with a premium price tag, especially in APAC, where we are still years away from reaching price parity between EVs and conventional vehicles. The cost of purchasing an EV, therefore, is still a key challenge to EV adoption in the region. Hence, where Europe started their e-mobility journey with cars and private ownership, public transport has emerged as the more practical route to electrification in APAC. Case in point, Singapore has been building up its ebus charging infrastructure. Recent initiatives include the delivery of advanced charging platforms to support 40 single-deck electric buses. Using ABB’s OppCharge platform, ebuses in one fleet can be recharged in less than 10 minutes through an automated rooftop connection.
To assess the effectiveness of such a strategy, look no further than China. As the first country to invest heavily in ebuses, China is now the world leader in this category, with 14% of its fleet being electric, far ahead of Europe (0.2%) and the US (0.03%). This is testament to the potential that APAC has in disrupting the e-mobility industry and becoming a world-class leader in its own right.
Unique cultural contexts as a catalyst for EV innovation
In Southeast Asian countries like Indonesia, Vietnam and Thailand, where two and three-wheelers such as motorbikes or tricycles have long been the dominant form of transport, such vehicles are a promising stepping stone to electrification. The price difference between electric and conventional vehicles for two-wheelers is also much narrower, making going electric a more realistic option.
With electric two-wheelers already accounting for 60% of the avoided oil consumption from electric vehicles in 2020, and expected to make up 77% of sales by 2040, this is a category that is brimming with potential. Tapping into this burgeoning local market, Vietnam’s national automaker VinFast has sold over 50,000 e-motorbikes in 2019, while another Vietnam-based electric bike startup Dat Bike raised US$2.6 million this year to fuel its ambition of becoming the motorcycle company of Southeast Asia.
With Southeast Asia getting a headstart, the region is well-placed to turn its unique cultural context into a competitive edge and lead innovation in the mobility industry.
Looking ahead: Setting clear standards on charging infrastructure
We have well learned from first-mover countries that charging infrastructures are critical to facilitating EV take-up — but looking beyond accessibility through scale, interoperability of charging stations will also be key as we build up our infrastructure.
Currently, there are still a lot of concerns over areas such as charging protocols, which is further complicated by emerging issues, such as the incompatibility between charging infrastructure for electric motorbikes and cars. Operating in such an uncertain climate will inevitably stall our progress in e-mobility, hindering innovation and holding developers back from investing in EV infrastructure.
To pave the road ahead for EVs, industry players and governments across APAC must work together to set clearer guidelines. To this end, ABB hosted a ‘2020 Smarter Mobility Innovation Forum’ in Indonesia last year, bringing together government and industry stakeholders to discuss solutions that will accelerate the country’s growing EV market.
The way forward
APAC is at crossroads for EV adoption. Countries have an opportunity to launch forward and go, with a much faster time to fruition — and this could not come at a better time. As the world finds a new rhythm to live by in a pandemic, we are seeing the usual hustle and bustle return to cities across the region. If APAC is to secure a green economic recovery, we have to act now and make the shift towards a zero-emission, electrified transport network.
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