Electric car trends in 2023 for Emerging Economies

Electric car markets in Emerging Economies like Ghana, India, Thailand and Indonesia are showing promising signs of increasing electric car sales.

AUTOMOBILE INDUSTRY NEWS

Salman Chaudhary, Founder Pinkywheels.com

7/19/20233 min read

EV on a Charger
EV on a Charger

Electric Car Trends in 2023 for Emerging Economies

Ghana, India, Thailand, and Indonesia are showing promising signs in EV Sales

The electric car market in emerging economies has been experiencing growth in recent years, although it still lags behind major markets such as China, Europe, and the United States. Countries like Ghana, India, Thailand, and Indonesia have shown promising signs of increasing electric car sales, but several challenges need to be addressed for further adoption.

One of the key barriers to electric car adoption in emerging markets is affordability. Many potential consumers are unwilling to spend more than $20,000 on an electric car, making it crucial to offer more affordable options that cater to their purchasing power. The availability of affordable electric cars is vital for driving mass-market electrification in these regions.

India, in particular, has witnessed significant growth in electric car sales. In 2022, electric car sales in the country quadrupled compared to the previous year. Tata Motors, one of the leading domestic manufacturers, accounted for over 85% of these sales. It is worth noting that the Indian market is currently geared towards shared and smaller mobility solutions, with electric three-wheelers being more prevalent than cars. This trend indicates a focus on sustainable urban transportation and highlights the potential for further growth in the electric vehicle sector.

According to the "Annual India EV Report Card" by JMK Research, India witnessed a remarkable surge in its electric vehicle (EV) sales during fiscal year 2023, surpassing 1.2 million units, marking a staggering 174% year-on-year increase. Notably, electric two-wheelers constituted the majority, accounting for over 60% of the total units sold. Additionally, passenger electric three-wheelers also made a substantial contribution, comprising 29% of the overall EV sales.

Thailand is another emerging market that has seen a notable increase in electric car sales. The presence of Chinese carmakers offering competitive prices has been a driving force behind this growth. Additionally, the Thai government has implemented various incentives, such as subsidies, tax reductions, and import duty waivers, to encourage the adoption of electric vehicles. These measures have contributed to the expansion of the electric car market in Thailand and demonstrate the positive impact of supportive policies in stimulating demand.

Indonesia, with its status as the world's largest nickel miner, has experienced a significant surge in electric car sales. In 2023, sales of electric cars in the country surpassed 10,000 units. To further bolster the adoption of electric vehicles, the Indonesian government has introduced new incentives aimed at supporting the sales of electric two-wheelers, cars, and buses. These incentives are part of a broader strategy to strengthen domestic manufacturing capacity in EV and battery production. With its abundant mineral resources and attractive investment opportunities, Indonesia has the potential to become a major manufacturing hub for electric vehicles and their components in the region. But despite setting ambitious electric vehicle (EV) targets, Indonesia is currently trailing behind its Southeast Asian counterparts. Vietnam has taken a substantial lead in electric two-wheeler sales, while Thailand appears to be on track to lead in electric four-wheeler adoption. The analysts' cautious projections regarding Indonesia's EV growth serve as a reminder that the current pace is inadequate to achieve its ambitious goals. Moreover, with Thailand serving as the region's prominent car manufacturing hub, the pressure is further amplified on Indonesia's automotive industry, including the potential impact on future export markets.

One notable challenge in emerging markets is the limited availability of electric car models, with a current focus on larger and luxury options. To achieve mass-market electrification, it is crucial to develop smaller, more affordable electric car models that align with the needs and purchasing power of consumers in these regions. Offering a wider range of options will be essential in encouraging greater adoption of electric vehicles and meeting the growing demand for sustainable transportation solutions.

When analyzing data on electric car markets in emerging economies, it is important to consider the discrepancies between factory shipments and insurance registrations. These differences can result in varying perspectives on market growth and dynamics. For instance, in emerging markets like China, the export shares of commercial vehicles, including buses and trucks, significantly impact the comparison between factory shipments and insurance registrations. Understanding these nuances is crucial for accurately assessing the performance and trends in electric car markets.

Conclusion

The data on electric car markets in emerging economies provides both promising signs of growth and challenges to overcome. Affordability, supportive policies, and the development of local manufacturing capabilities are critical factors for driving mass-market electrification in these regions. By addressing these challenges, emerging markets can accelerate the transition to a more sustainable transportation system and contribute to global efforts to reduce emissions and combat climate change.