Why Asia is Poised to Lead the Charge in Electric Vehicle Innovation

Asia is the global powerhouse for everything under the umbrella of services and manufacturing. The EV space in Asia was very niche in the past decade. But currently the Asian markets, particularly China, India and South Korea have become a force to be reckoned with. It is now the global destination for EV innovation from batteries to automobiles. A lot of components are supplied globally from the coasts of Asia.

According to Statista Market Insights, the revenue in the Asian EV sector this year is projected to reach $313 Billion in 2023 and is poised to have a CAGR of 6.42% with projected market volumes reaching $428 Billion in 2028. A lot of Asia-based firms are continuously on the receiving end of lucrative investments from all over the world. A lot of factors make Asia a centre for EV innovation and here are a few of them.

Manufacturing Prowess

The manufacturing prowess of Asia is a well-known phenomenon globally. It is home to a lot of world-famous battery makers like China’s CATL, South Korea’s LG Chem and Japan’s Panasonic. These makers have continuously innovated the science of battery making, these makers distribute their batteries to a lot of car makers all over the world.

Apart from batteries, the manufacturing systems in Asia, particularly China is already robust. The existing infrastructure with well-planned logistics, supply chains and of course, mass production and skilled labour can be used to gain a competitive edge in the market.

Every smartphone has chips which are made in China or South Korea. And the majority of the world’s li-ion batteries are made in China, South Korea and Japan. Li-ion batteries are the main component of EVs and Asian nations have developed them and are dominating the markets.

Government Assistance

 The Asian governments of late have given dedicated support to the manufacturing sector. Particularly in Japan, they are attempting to encourage its citizens to adopt EVs by giving benefits, tax breaks, subsidies, infrastructures and many more. The active initiative by the governments is a good move for makers to spend more of their resources on innovation. This is also good for the government as they can implement this technology into public transportation, which is the major means of transport there.

Two decades ago, EVs were unreliable, but the government policies that were implemented fast-forwarded its progress and are now extremely efficient.

It can be seen that numerous American and Taiwanese chip makers and corporations setting up centres in India due to the generous benefits offered by the governments.

Developing Market

The economic condition of the Asian nations has skyrocketed, and the growing population of the middle class makes it a lucrative market for any business to venture into. This potential allows both domestic and international automakers to invest in research, development and production facilities there. People with more disposable income are increasingly opting to buy automobiles and monetary assistance to car buyers is also available. This factor is a win-win situation for the consumer, the vendor and the banks.

The Indian economy surpassed UK’s economy to secure itself as the 5^th most powerful economy globally. This is solid proof which shows India is a global destination for various businesses.

Sustainability Efforts

The global warming phenomenon has no longer become an event to be ignored. Rapid industrialization and urbanization have resulted in severe air quality drops in major metropolitan cities. Asian countries have already prioritized this and are developing new technology with this in mind. The numerous conventions held globally have allowed collaborations between various nations in sharing their technologies with the larger goal of saving the environment.

They are increasing the need to adopt EVs to curb the emission problems from traditional engine automobiles.

Research and Development Collaborations

It is a well-known fact that American and European automakers have strong research, development and manufacturing collaborations with Chinese and Japanese automakers. These kinds of partnerships foster technology sharing, market penetrations and other numerous avenues for innovation. The move to adopt EVs is not an event restricted to Asia, it’s a global target.

EV Infrastructure innovation is seen as the panacea to air pollution. The Asian prowess is paramount to this evolution. It can be said EV innovation is a global collaborative effort where everyone pitches their own resources to develop it.

Skilled Labour

Asian nations boast of a huge literacy rate, given the competitive nature of the education system, it can be guaranteed that the skills of employees are excellent. It is a proven fact that Asia spearheads numerous innovation programs in the field of research and development. For a nation's economy to thrive, skilled labour, supportive government and a concrete education are the foundation. And a lot of Asian nations do not lack in this regard.

EV adoption is still in its infancy, but it is on its way to becoming mainstream. They have already proven their cost-friendly nature. They are already giving excellent mileage which is a huge selling point to the masses. As they say, necessity is the mother of invention, and EVs have grown when the market really needed them.