Planning for EV Infrastructure in Asia

The adoption of electric vehicles (EVs) is gaining momentum worldwide as governments and communities strive to reduce fossil fuel emissions and meet international commitments to climate change management. Asia, as the most populous and economically diverse continent plays a critical role in the global EV market. With large, and growing urban centres and a burgeoning middle class, immense potential exists for companies considering investing in EV infrastructure in Asia. Jari Hietala, managing partner offers an overview.

Government Involvement and Policy

China probably stands as the leader in the development of EV infrastructure in Asia, both in terms of manufacturing as well as consumer adoption. The Chinese government has led with policies and initiatives to stimulate the EV market, including subsidies, tax incentives and research funding. The New Energy Vehicle (NEV) mandate requires automakers to produce an annually rising EV percentage of total cars produced – at 18% in 2023. This has encouraged significant domestic and international investment in Chinese electric vehicles and the following EV charging infrastructure, making EV ownership more appealing.

Likewise the Indian government launched the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme aimed as providing financial incentives for EV manufacturers, to create charging infrastructure, and to foster research and development in EV technology. However the number of charging stations remains insufficient, especially in rural areas. According to a 2022 report, the ideal global EV/public charger ratio is around 6-20 EVs per public charger, where in India, the ratio stands at an estimated 135. Government at various levels are urged to fund the addition of a further 46,000 charging stations around the country. Meanwhile EV sales continue to skyrocket with annual sales estimated to reach 106 million by 2030, leading to 4,000 further public chargers added annually.

Indonesia is also committed to major increases in EV production with an anticipated 15 million + vehicles produced by 2030, with government incentives and tax exemptions in place for EV purchasers as well as conversions from conventional to electric motorcycles. However at present most charging infrastructure is located in major centres in Java. The Energy Ministry has plans for major expansion across the country as well as developing an integrated application that will serve as a monitoring and evaluation tool for charging stations, and for users seeking a nearby station. Estimates are that Indonesia will need 31,000 new charging stations by 2030 and a further 52,000 battery swapping stations. Indonesia also benefits from being a growing source of some of the raw materials for battery production, a critical advantage in coming years for the development of its manufacturing capacity.

Japan is well advanced along this route with some 30,000 EV chargers already in place nationwide, with some 300,000 planned by 2030. The Japanese government provides incentives of between 50-100% of installation costs for new stations, while requiring that all new buildings from 2025 include charging facilities within the structure.

South Korea has seen a lower than global average uptake of EVs, however the government has set aggressive targets for strong growth. Regulations and incentives to promote EV adoption and expand charging infrastructure are under way with increased involvement from private investors. There are currently over 100 operators in South Korea offering some form of charging services with the government seeking to achieve a target of 1.23 million charges by 2030 with subsidies of up to 50% available for DC chargers.

The Malaysian government similarly has announced policies intended to boost the EV charging infrastructure in coming years including up to 100% reduction of income tax up to 2032 for local manufacturers of EV charging equipment. Manufacturers are also entitled to 100% investment tax allowance, deducted at 100% of statutory income for a period of five years. Malaysia is expected to develop one of the highest EV penetration rates globally with Volvo, Mercedes-Benz and now Tesla headquartering themselves in the country. The likely 100,000 EVs on the road by 2030 will include up to 50,000 buses and large trucks. To support this, the government has set a target of 125,000 EV charging stations across the country by 2030.

Thailand, also a major automobile manufacturing hub, is swiftly transitioning to EVs both in production and in consumption, however until recently there has been a lack of public charging infrastructure, especially outside of Bangkok. A recent proliferation of companies offering EV charging service still focus mainly in Bangkok with around 1,500 station available in Sept 2023, and with estimates of planned stations numbering 700,000 by 2030. Thailand’s Board of Investment (BOI) has offered a five-year tax exemption for investments in charging stations numbering 40 or more.

Technology Advancements

The growth of EV infrastructure in Asia is closely tied to advancements in charging technology. High-speed charging stations are becoming more widespread, reducing concerns about range anxiety and increasing the feasibility of long-distance EV travel. Wireless charging technology is also being explored and tested, promising even greater convenience for EV owners.

Also driving growth of EVs is the rapid advancement in battery technology. Companies in South Korea, China and Japan are at the forefront of battery development. Continuous innovation in lithium-ion batteries has led to higher energy densities, faster charging times, and longer lifespans, making EVs more attractive and convenient for Asian consumers. State-level organisations across Asia are seeking partners in investing and operating in EV charging and battery production and infrastructure as each country attempts to meet its 2030 targets.

The convergence of EVs with autonomous and connected vehicle technologies is a further looming development in the automotive industry. Companies like Tesla, NIO, and Xiaomi are leading the way in integrating autonomous features into EVs, where these enhance the driving experience while contributing to reduced traffic congestion and accidents. The proliferation of connected EVs offers data-sharing opportunities to offer efficiencies of charging infrastructure and energy management.

Challenges

The looming rise in EV charging and battery management infrastructure will lead to several challenges. These include the age-old urban v rural divide, where lower-density rural services will lead to gaps. The proliferation of service providers and their various apps will likely lead to intense competition and market confusion, requiring some degree of mandated standardisation to ensure continued consumer adoption and consistent experience.

National power suppliers will need to address and manage grid capacity, as more EVs on roads create additional demand. National energy planning will need to factor grid resilience and balanced supply. The widespread adoptions of EVs in Asia has the potential to significantly reduce carbon emissions, especially in those large cities that struggle with air quality…however governments will need to invest in suitably clean electricity generation.

Asian Insiders partners offer local knowledge and experience in the EV ecosystem in their market. EV infrastructure in Asia is a key sector in our work and we are ready to assist clients with enquiries, research and connections. For a no-obligation call, please contact Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com

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