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Asia-Pacific Electric Car Market is Expected to Reach a Value of $761.97 Billion by 2028, at a CAGR of 34.6% During the Forecast Period 2021-2028- Exclusive Report by Meticulous Research® – Digital Journal


According to a new market research report titled “Asia-Pacific Electric Cars Market by Propulsion Type (BEV, FCEV, PHEV, HEV), Power Output (Less Than 100kW, 100 kW to 250 kW), End Use (Private, Commercial), and Geography —Forecast to 2028,” the Asia-Pacific electric cars market is expected to grow at a CAGR of 34.6 % from 2021 to reach $761.97 billion by 2028. By volume, this market is expected to grow at a CAGR of 40.4 % from 2021 to reach 53.8 million units by 2028.

Electric cars use multiple traction motors powered either by a rechargeable battery pack through an internal combustion engine which charges the battery pack of the vehicle, which in turn runs the traction motor and propels the vehicle. The growth of this market is backed by supportive government policies and regulations, increasing investments by leading automotive OEMs, and decreasing battery prices. Moreover, increasing the adoption of electric mobility in emerging APAC countries and increasing EV and battery manufacturing capabilities in Southeast Asia provide significant opportunities in this market. However, the lack of charging infrastructure in developing APAC countries obstructs the growth of this market to some extent. The high cost of electric vehicles and range limitation of EVs are major challenges for the growth of the Asia-Pacific electric cars market.

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The Impact of COVID-19 on the Asia-Pacific Electric Cars Market

The outbreak of COVID-19 slowed down vehicle sales in 2020, including electric cars. The Asia-Pacific electric cars market was moderately affected due to the quick recovery of automotive manufacturing industries in China. Developing countries witnessed a sharp decline in their economy due to low consumer demands and increased prices for essential commodities. The adoption of electric cars also decreased significantly in the region. The high cost of electric cars also remained a restraining factor for the growth of the electric cars market in these countries. However, stringent government regulations in APAC towards phasing out ICE vehicles till 2030 is expected to support the market’s growth during the forecast period.

In Thailand, the government has introduced an EV roadmap to produce about 250,000 electric cars and establish itself as an Asian EV hub by 2025. Moreover, the tax incentives provided by the government on purchasing electric cars are poised to increase the adoption rate in a couple of years, thus supporting the market growth during the forecast period.

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Decreasing battery prices is one of the major drivers for the growth of the APAC electric cars market

Battery electric vehicles majorly include private cars and public transport vehicles for shared mobility. However, the cost and range limitations associated with electric car batteries are a major restraining factor for the complete transition to electric mobility. However, technological advancements have brought down the cost of electric car batteries. Today, battery manufacturers are aiming to provide EV OEMs with high-capacity batteries at reduced prices to ensure the overall cost of a vehicle falls under the subsidized range. The average price per kilowatt-hour for batteries is expected to be approximately USD 100/kWh by 2023, making it possible for EVs to be priced the same as comparable gasoline-powered vehicles.

Moreover, the increasing investments by governments across the world for setting up battery manufacturing plants are also supporting the decrease in battery prices. For instance, in 2020, the Government of India announced plans to invest USD 4.6 billion in incentives for setting up advanced battery manufacturing facilities in the country and promoting the use of electric cars. Additionally, the government announced to retain import tax rate of 5% for electric car batteries until 2022 and will increase to 15% thereafter to promote local manufacturing. Therefore, such initiatives will help reduce the total manufacturing cost of batteries, thus promoting electric car adoption in the coming years.

Several players in the market are incorporating advanced technologies and focusing on ways to effectively reduce the vehicle’s battery size and improve its performance and power to weight ratio. In 2020, Samsung SDI (South Korea) commercialized a li-ion battery product that would replace liquid electrolytes in a battery cell with a solid electrolyte to improve battery performance. The battery prices could further fall to USD 58/kWh by 2030 if solid-state batteries become stable enough to be commercially used in vehicles. All these developments by major players to reduce the vehicle’s battery size and improve the performance of electric cars are expected to contribute to the overall growth of the electric cars market during the forecast period.

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To provide efficient analysis, Meticulous Research® has segmented this market based on propulsion type (hybrid vehicles, battery electric vehicles, and fuel cell electric vehicles), power output (less than 100 kW, and 100 kW to 250 kW), end use (private and commercial use) and geography.

Based on propulsion type, the Asia-Pacific electric cars market is mainly segmented into hybrid vehicles, battery electric vehicles, and fuel cell electric vehicles. The hybrid vehicles segment is estimated to account for the largest share of the Asia-Pacific electric cars market in 2021. The large share of this segment is mainly attributed to increasingly stringent automotive emission regulations in this region, rising demand in consumers for high fuel efficiency vehicles, investments by automotive OEMs for hybridization of vehicle powertrain, and low cost of hybrid compared to battery electric vehicles. However, the fuel cell electric vehicles segment is expected to witness significant growth, as fuel cell electric vehicles offer several advantages such as fast refueling and zero tailpipe emissions.

Based on power output, the Asia-Pacific electric cars market is segmented into less than 100 kW and 100 kW to 250 kW. The less than 100 kW segment is estimated to account for the largest share of the Asia-Pacific electric cars market in 2021. The large share of this segment is mainly attributed to the increasing use of light electric cars in the central business districts of major cities across Asia-Pacific, increasing implementation of electric cars for shared mobility services, falling battery prices, and increasing investments by electric vehicles startups in this segment. However, the 100 kW to 250 kW segment is expected to grow at the highest CAGR during the forecast period. The rapid growth of this segment is mainly attributed to the increasing initiatives by leading automotive OEMs to launch more powerful electric cars and increasing regulations to reduce tailpipe emissions.

Based on end use, the Asia-Pacific electric cars market is segmented into private use and commercial use. The private use segment is estimated to account for the largest share of the Asia-Pacific electric cars market in 2021. The large share of this segment is mainly attributed to the increasing consumer demand for fuel-efficient and zero tailpipe emission vehicles, government incentives to promote sales and manufacturing of electric cars, and increasing fuel prices. However, the commercial use segment is expected to grow at the highest CAGR during the forecast period. The rapid growth of this segment is mainly attributed to the increasing demand for electric cars in shared mobility services and corporate taxi fleets.

Geographically, China is estimated to account for the largest share of the Asia-Pacific electric cars market in 2021 by value as well as by volume. The large share of this country is mainly attributed to the extensive government support and expansion in charging infrastructure, tax exemptions for purchasing an electric car by 2023, improving the quality of electric cars, increasing charging facilities, and subsidies offered by the Ministry of Commerce.

China’s EV market is growing significantly with extensive government support and expansion in charging infrastructure. Increasing government efforts to push electric car sales to up to 25% of the car sales by 2025 have been driving the market growth considerably in China. To achieve the set target, the government has extended the tax exemptions for purchasing electric cars by 2023. Thus, considering the above facts, the investors have started investing in this market as they seek this huge opportunity. The investment requirement in China’s electric vehicles industry has been estimated at USD 57 billion. Additionally, foreign automobile companies are infusing investments worth USD 67.8 billion in China’s electric vehicles industry. For instance, in 2018, SAIC Volkswagen invested USD 2.45 billion in building an electric vehicles plant in Shanghai.

However, Japan is estimated to account for the second-largest share of the Asia-Pacific electric cars market in 2021 by value as well as by volume. The large share of this country is mainly attributed to the increasing awareness among the locals about the transportation alternatives, environmental impact of vehicular emissions, and growing support of government to automotive OEMs and consumers in the form of subsidies and tax rebates.

Japan has been an early adopter of electric mobility solutions by launching several top-class models globally. Increased awareness among the locals about the transportation alternatives, environmental impact of vehicular emissions, and growing government support to automotive OEMs and consumers in the form of subsidies and tax rebates are factors driving the growth of the electric car market in Japan. For instance, the government grants approximately USD 3,000 on the purchase of a 30-kWh Nissan Leaf vehicle. Moreover, consumers buying zero-emission cars in the country have a relaxation of 50% of annual automobile tax.

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The key players operating in the Asia-Pacific electric cars market are Hyundai Motor Company (South Korea‎), Honda Motor Co., Ltd. (Japan), Toyota Motor Corporation (Japan), Tata Motors Limited (India), Mahindra and Mahindra Ltd. (India), NIO Inc. (China), XPeng Inc. (China), Geely Automobile Holdings Limited (China), Nissan Motor Co., Ltd. (Japan), and Mitsubishi Motor Corporation (Japan).

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