If you look at the adoption of EVs in Asia, two things quickly become clear. First, many countries are making progress toward their announced goals. Second, reaching these is possible but requires a significant amount of investment. For foreign companies, the region remains extremely promising despite some potential bumps in the road. Asian Insiders Managing Partner Jari Hietala shares an overview of the current situation and offers a glimpse into the future. For more insights, download our latest report, Asia’s Automotive Industry 2025: Opportunities and Challenges, by clicking here.

The rise of electric vehicles (EVs) in Asia was swift and took many by surprise. Sales of both battery (BEV) and plug-in hybrid (PHEV) varieties increased steadily in recent years. China went all in on the sector and has become the global leader. Several Southeast Asia countries have begun their own transitions while India is scaling up its activities.

Nearly every country in the region has set a target related to EV adoption. Reaching these will not be as easy as selling more electric cars, trucks, two- and three-wheelers. Several markets find themselves needing to develop infrastructure, including fast charging stations and aftersales service centres.

Even with existing shortcomings, consumer sentiment of EVs is increasingly positive. A desire to reduce household expenses, awareness of environmental issues and the growing trendiness of owning an EV are a few of the factors driving the change.

Foreign organisations considering entrance into Asia or expansion into new markets must study each country carefully before making a decision. Here is a brief overview of the EV situation in select Asian markets.

Overview of EVs in Asia

China

China’s EV ambitions date back to the early 2000s when the government rolled out a number of programmes and initiatives designed to support the sector’s growth. However, it took some time for the industry to take off. As recently as 2019, EVs across the country accounted for a little more than five percent of total vehicle sales.

The situation has since been turned on its head. Sales of what China refers to as New Energy Vehicles (NEVs) could account for half of new vehicles in 2025. Initially, the goal for this was 2035. NEVs include BEVs, PHEVs, and hybrids.

Projections indicate that EV numbers are expected to increase, although the situation has become complex. Domestically, Chinese manufacturers are engaged in a price war with local sales having slowed down in recent times. Overseas, these cars are priced less than other imported EVs but higher than what they go for in China.   

Looking ahead: Chinese officials recently warned domestic EV players over the ongoing price war. It remains to be seen how this will impact sales, but the country is expected to comfortably remain the world’s largest EV market.

Elsewhere, China’s automakers have already established a foothold in many overseas markets, including several in Asia. Existing firms or those considering market entrance need to adjust their strategies to account for this.

Japan

Among developed nations, Japan has been the slowest to adopt EVs. Somewhat surprisingly, sales fell notably in 2024 with limited incentives, lagging infrastructure and high prices causing the public to turn to other options.  

Japanese consumers continue to prefer hybrid vehicles over EVs. The government has also explored hydrogen vehicles as another alternative to internal combustion engine (ICE) vehicles. Domestic carmakers have been slow to launch electric ranges which has allowed Chinese and South Korean manufacturers to gain a foothold in the market.  

Looking ahead: Without a clear strategy, the EV market in Japan will likely see limited growth over the coming years. There remain opportunities in terms of infrastructure development and other support sectors, but hybrids and perhaps even hydrogen vehicles will likely be preferred.

South Korea

There is now momentum behind EVs in South Korea following years of limited interest. The government is now making major investments to support industry growth and has made subsidies available to consumers and businesses. A target to have more than four million EVs on the road by 2030 is now in place.

Achieving that necessitates significant work. The country’s charging infrastructure is limited, making scale and fast charging development priorities. There is also a need to convert ICE production lines to EV-capable ones.

Challenges in Korea do remain. Short-term demand for EVs will be muted as buyers wait for infrastructure advancements and lower-priced options. The presence of hybrids and hydrogen vehicles may create additional competition.

Looking ahead: Unlike Japan, a more straightforward path for EVs to gain a foothold in South Korea exists. The government has clear targets in place and an understanding of what needs to be done to reach these.

Most opportunities here are related to the country’s charging infrastructure market which is predicted to record double-digit growth annually between now and the decade’s end. There is also a need for advanced battery technologies.

Thailand

Thailand finds itself in an interesting position. There was a slight decline in EV sales last year due to a few different factors. Yet, a downturn is likely to be one-off as EV sales are projected to grow by as much as 40 percent this year.

Even with strong sales, the country is looking to develop key areas. Charging points, maintenance centres and other facilities are in short supply compared to the number of EVs on the road currently and the estimated number moving forward.

The development of a robust EV-based supply chain is another issue. The process of converting ICE capabilities to EV ones remains a work in progress. Completing the switch is crucial if Thailand is to maintain its status as an automotive manufacturing hub.

Looking ahead: There are many opportunities available in the Thai EV sector with the government committed to its future growth. You can read more about the outlook in our recent article here.

Indonesia

Like Thailand, Indonesia has become a hub for EV production. Yet each country’s capabilities are far different. The latter has the natural resources required for battery development but now needs to establish its production base and value chain. Additionally, EV adoption is still in the early stages.

The long-term outlook is promising. The country’s growing economy and various goals are expected to drive the sector’s rapid expansion. Two and three-wheelers could have the most potential in terms of production and sales.

Looking ahead: The Indonesian government’s goal to scale EV capabilities requires overseas technology and knowledge. There will also need to be a focus on developing infrastructure and the greater supply chain. That being said, goals and commitments are in place to support these activities.

Entering Asia

Companies considering investing in Asia’s EV landscape are urged to conduct thorough market research. Most countries have different needs and capabilities as well as operating climates. Finding the right fit requires due diligence.

Partnering with Asian Insiders can ensure you understand what markets are best for your organisation and then tailor a strategy capable of delivering results. Think of it as your roadmap to success.

For additional information on Asia’s dynamic auto industry, download our latest report,
Asia’s Automotive Industry 2025: Opportunities and Challenges, by clicking here.

A growing number of EVs are hitting the road in Asia and this is creating opportunities. To learn more, schedule a no-obligation call with Jari Hietala, Managing Partner: jari.Hietala (at)asianinsiders.com