Traffic in emerging Asian countries has become synonymous with congestion and smog. Driving in some of the major cities in this region can be a nightmare, and don’t even get me started on the current air pollution crisis.

In order to preserve a greener and more sustainable environment, the major cities in this region are striving to develop and adopt electric vehicle (EV) technology. As more and more consumers become environmentally conscious, the demand for electric vehicles has seen an uptick. Driving attitudes across the region have changed dramatically with the introduction of electric vehicles into the personal mobility market.

A report by the International Renewable Energy Association (IRENA) indicates that by 2025, 20% of all vehicles on the road in Southeast Asia will be of the electric variety, including 59 million electric two- to three-wheelers and 8.9 million electric four-wheel vehicles. The Southeast Asian region, home to a market of 640 million should rightly be part of this technological upheaval.

With this demand, undoubtedly comes opportunity. “Thailand and Vietnam would be the two major forefronts,” Eric Yip, Marketing Director at Quantel emphasized. EVs are a growing market in Vietnam, especially electric motorcycles (e-motorbike). Whereas, “the vehicle sale in Thailand itself is expected to reach 1.2 million units, making Southeast Asia quite a big market in automotive”, he added.

“Lots of automotive companies are ready to transform and adopt electric vehicles, and some of them have started by building components instead of the whole electric vehicle.” Yip highlighted that almost all the key components for electric vehicles, such as batteries, would soon be built in Southeast Asia, making it a potentially massive market.

Mentor, an EDA company, have observed the increasing tendency for carmakers in the region to take EV electronics design in-house. With electronics becoming a bigger piece of the differentiation of a car, it is now being considered a core competency. “Companies need to manage the entire design process and focus on product traceability. So, most of them need to focus on digital data management including design libraries and design data”. Nina Lin, General Manager of Taiwan and ASEAN at Mentor, has seen huge investments by the likes of Ford and GM into PCB design data management infrastructure.

Bumpy road ahead

However, there are still some hurdles to overcome before this region can truly adopt electric vehicle technology. Andreas Mangler, Director of Strategic Marketing at Rutronik pointed out that the main barriers to adoption of electric vehicles in Southeast Asia are the higher rates of tax on electric vehicles, the lack of a charging infrastructure with convenient proximity and the limited driving range of the vehicles.

He suggested that governmental intervention is the key to driving the growth of electric vehicles in ASEAN, at a level that ensures the deployment of a charging infrastructure. This infrastructure must adhere to compatible standards, to support mass deployment.

Quantel’s Yip, agrees. Electric vehicles may need policies driven by governments such as London’s ultra-low emission zone (ULEZ), which will now charge inefficient vehicles an entry fee to access the city of London. “I believe that the Vietnam government is looking at moving in this direction: to only allow electric vehicles on the roads of the cities. They are planning for this soon”.

In fact, “the opportunities for electric vehicles in Asian markets are almost limitless, if we look beyond the immediate ASEAN region”, said Mangler. He thinks China is pursuing a very vigorous strategy for electric vehicles, where the advantage will be a leapfrogging of the Internal Combustion Engine (ICE), where there is entrenched global competition and a high environmental price. This means China and other countries are providing and will continue to provide ready markets, for ASEAN nations, for the E&E devices required for electric vehicles.

Lin argues that petrol is relatively cheap in Southeast Asia, and for EV implementation to be successful, infrastructure for battery recharge stations is critical. “But it will need around another 5 years to build up the infrastructure before we can see any success.” However, she believes that Southeast Asia can be very successful and remains an ideal location to manufacture EV and to export.

Rohit Girdhar, Vice President & Head of Strategy and Market Development Asia Pacific at Infineon Technologies believes a number of changes need to happen before Southeast Asia develops a viable domestic market. “Firstly, you need infrastructure and the availability of a changing network, then the cost of ownership needs to be lower or comparable to conventional vehicles and then government incentives”.

This isn’t necessarily far off, and Rohit feels that countries which are still in the development stage could be faster at adoption. He feels that Southeast Asia will benefit from the mass deployment of EVs in China as this will bring the cost of ownership down.

Light at the end of the tunnel

“With home grown OEMs sprouting up such as Malaysia’s Proton and Vietnam’s Winfast, the appetite for EVs is definitely growing. But as a region, ASEAN’s GDP per capita is still low and the current market remains small”, Rohit adds. He feels that despite the promise shown with increasing emphasis on EVs it is still too early for this region.

Leo Wu, Regional Manager at Mean Well, also views Southeast Asia as being in its early stages of development. “Battery technology is not very mature yet, and related different charging systems are not yet in place either”, he said. Even though Mean Well has been engaged with some related projects in the Philippines, Malaysia and Singapore, they only started with small segments of EV market.

In addition to new government policies, Wu suggests that it will also take a strong business model such as that of electric scooter company, Gogoro, for EVs to really take off in this region.