APAC electrified vehicle market is projected to reach 23.8 million units by 2026
The Asia-Pacific (APAC) region is set to experience a significant surge in the adoption of electric vehicles (EVs) over the coming years, driven by advancements in battery technology, the expansion of charging infrastructure, favorable government policies, increasing consumer awareness, technological advancements, and growing customer demand. According to GlobalData, the APAC electrified vehicle market is projected to reach 23.8 million units by 2026, with a compound annual growth rate (CAGR) of 25.6 per cent between 2021 and 2026.
GlobalData’s report highlights that the APAC region is leading the global electrified vehicle market, accounting for 11.7 million units in 2022, predominantly driven by China’s dominance in EV adoption.
Lucy Tripathi, Senior Automotive Analyst at GlobalData, emphasizes the need for APAC countries to expedite the development of charging infrastructure to accommodate the growing market and the rise of e-mobility. Tripathi emphasizes the importance of convenient and affordable publicly accessible chargers as EVs become more prevalent. Governments in the region have taken measures to support EV charging infrastructure, including direct investment in publicly accessible chargers and incentives for EV owners to install charging points at home.
Various countries in APAC, including India, Thailand, and Indonesia, have implemented policy assistance programs to promote the adoption of EVs. India’s $US3.2 billion incentive program, which has attracted $US8.3 billion in investments, has been instrumental in boosting the country’s EV and component manufacturing sector. Thailand and Indonesia are also enhancing their policy support programs, serving as valuable examples for other emerging market economies.
Tripathi emphasizes the crucial role of policy in directing business strategies towards electrification and facilitating consumer adoption of EVs. Government programs, such as vehicle purchase incentives and direct incentives for automakers, have played a significant role in driving early adoption of EVs in countries like China. Additionally, governments in key markets have raised their targets for EV adoption and implemented legislative assistance to support vehicle and battery production as well as mineral supply chains.
To support the energy transition and meet the growing demand for clean energy technology, the mining and processing of essential minerals, such as lithium, must rapidly increase. Accelerating innovation in areas such as optimized battery sizes and battery recycling can also contribute to reducing the demand for essential resources. Diversifying EV supply chains and reducing reliance on specific regions, particularly China, can enhance resilience and sustainability in the industry.
Tripathi concludes by highlighting the importance of addressing sustainability, resilience, and security concerns in the EV supply chain. As the prices of battery materials increase, finding alternatives and reducing the reliance on essential resources becomes crucial. The supply chain for EVs is expanding, but manufacturing remains predominantly regional. To enhance resilience through diversification, EV supply chains should be a priority in EV-related regulations and initiatives.
The forecasted growth of the APAC electrified vehicle market presents immense opportunities for the region to drive sustainable transportation and contribute to the global shift towards cleaner mobility options.