by Over the past decade, major Asian economies like Japan, South Korea, China and India have seen tremendous growth in the automobile sector. However, this increased use of private vehicles has also led to rising concerns over environmental pollution and dependency on fossil fuels. Thankfully, governments and automobile manufacturers in Asia have realized the need to promote fuel efficient and environment friendly vehicles.
Japan leading the way in hybrids and EVs
Japan has emerged as a global leader in developing and adopting fuel efficient vehicles. Japanese automakers like Toyota and Honda were among the earliest to commercialize hybrid electric vehicles in late 1990s with their iconic Prius and Insight models. These hybrids delivered impressive fuel economy gains of over 40% compared to comparable gasoline cars. Today, hybrids account for over 50% of new car sales in Japan.
Japanese automakers have also invested heavily in battery and fuel cell electric vehicle technologies. Nissan’s Leaf is the world’s best selling all-electric car since 2010. Toyota is betting big on its new solid state battery technology to power affordable long range EVs in future. Japan aims to have all new passenger vehicles be electrified by mid 2030s to reach carbon neutrality goals. The government provides generous purchase subsidies and has built a wide nationwide fast charging network to support EV adoption.
South Korea focuses on hydrogen fuel cells
Like Asia (Japan, South Korea, China, India and ASEAN) Fuel Efficient Vehicles too realized the need to reduce oil imports and curb pollution early on. Korean automakers Hyundai and Kia have invested over $6 billion since 2013 to develop affordable fuel cell electric vehicles (FCEVs). Hyundai’s Nexo and Kia’s Nero are among the most affordable mass produced FCEVs available today with an operating range of over 500km.
South Korea’s government sees hydrogen fuel cells as the long term sustainable solution and aims for 200,000 FCEVs on roads by 2022. It plans to build over 100 hydrogen refueling stations this year from the current 30-odd stations. Subsidies of $33,000 are offered to buyers of FCEVs, bringing their prices at parity with gasoline equivalents. Korea’s automakers also export large numbers of FCEVs to Europe and California where hydrogen infrastructure is developing.
China’s aggressive new energy vehicle push
China has emerged as not only the largest automobile market but also the biggest market for new energy vehicles globally in recent years. Aggressive mandates require automakers to meet minimum sales quotas of new energy vehicles which include plug-in hybrids, battery EVs and FCEVs. This has forced global automakers to invest heavily in developing affordable EVs tailored for the Chinese market.
Domestic automakers like BYD, SAIC and Great Wall also lead in EV production. BYD is a dominant player in electric buses and commercial vehicles. Over 1.3 million new energy vehicles were sold in China last year, with over 1 million being pure electric cars. To promote wider adoption, purchase subsidies of up to $7,500 are provided and license plates in major cities are allotted through a lottery system favoring new energy vehicles. Over 25,000 public chargers have also been installed across China so far.
India focusing on stronger fuel efficiency norms
India is witnessing rapid motorization driven by its growing middle class. However, rising vehicle pollution and oil imports are big concerns. The government has therefore implemented the BS-VI emission standards from 2020, making India’s fuel and vehicle standards equivalent to Europe. Ambitious CAFE (Corporate Average Fuel Efficiency) norms have also been introduced, requiring automakers’ fleets to deliver over 25km/liter efficiency by 2022 phase wise from the current 18km/liter.
This has led automakers to aggressively push compact SUVs and hybrids over gasoline guzzling vehicles. Homegrown automaker Tata Motors launched its Nexon EV last year at a competitive $19,000 price point. Maruti Suzuki and Hyundai also offer CNG variants of their best selling models. The government plans to launch an FAME II incentive scheme soon with funds for charger installation and purchase subsidies for EVs to further boost their adoption rates.
Southeast Asian countries diversifying too
Countries like Thailand, Indonesia, Vietnam and Malaysia recognize the strain conventional vehicles put on their developing economies. Thailand has adopted Japanese know-how to become a hybrid export hub. Over 40% of cars sold in Thailand last year were hybrids, mostly Toyota and Honda models. Honda also assembles its hybrid City models in Thailand for exports within Southeast Asia.
Indonesia too offers tax breaks for hybrids and EVs. Its state owned companies like LG Chem are setting up battery production facilities to power the region’s electrification. Vietnam has earmarked $2 billion to develop battery and EV component manufacturing. Malaysia provides purchase rebates up to $7,400 for EVs to kickstart local assembly by brands like Hyundai and Proton. Overall, ASEAN nations are diversifying their automotive strategies through fuel efficiency, electrification and green manufacturing.
In conclusion, Asia has emerged as the global center of developing affordable fuel efficient vehicle technologies. Major automotive powers like Japan, Korea and China already enjoy self-sufficiency in manufacturing electric and hybrid powertrains that India and ASEAN countries are adopting too. Their efforts to promote such eco-friendly mobility through regulations, infrastructure buildout and incentives will help reduce dependence on oil imports as well as curb environmental pollution in the coming decades.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
