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Pushpank Kaushik, CEO of Jassper Shipping, writes for Splash today on electric vehicle adoption in emerging Asia.
The electric mobility wave is transforming markets worldwide, but in Asia’s emerging economies, its impact extends deeply into social, environmental, and public health spheres. India, now the world’s largest market for electric three-wheelers, is scaling up production, with new giga-factories underway to produce over 1.5 million electric vehicles annually. Meeting the EV demand across South and Southeast Asia will require an estimated $1.3trn in capital through 2030.
In May 2024, India’s electric vehicle sales grew by 20.88%, reaching 1.39m units, signaling significant growth potential for automotive suppliers. The Indian EV battery market, valued at $16.77bn in 2023, is expected to climb to $27.7bn by 2028. In line with its mission for 30% electric mobility by 2030, the government has reinforced its commitment by exempting customs duties on machinery imports for lithium-ion battery manufacturing. India is increasingly positioning itself as a global sourcing hub for auto components, with exports accounting for over 25% of annual production.
As per the PwC report, previously non-existent components such as batteries with advanced chemistry, electric motors, power electronics and software now make up at least 50–60% of an EV. Most of this component ecosystem is not present in India. Besides, the need for rare earth raw materials and high content of electronic child parts further challenges the local value addition potential.
Local manufacturers rely heavily on imported parts, particularly from China, to produce commercial EV motors with limited local value addition. Key components like BLDC motors, rare earth magnets, and laminated stators are largely sourced from China.
Essential EV parts for high-voltage circuits, such as connectors, contactors, relays, and DC-DC converters, are mostly imported due to the high capital investment required for local production. China and Taiwan dominate this supply.
High-voltage power electronics, including proprietary systems such as battery management systems (BMS), motor control units (MCUs), and vehicle control units (VCUs), rely on imported sub-components like IC chips, TIMs, and PCBs. Additionally, limited expertise in designing complex electrical systems hampers Indian OEMs, with CAN (controller area network) integration and testing heavily dependent on China.
By FY28, India’s auto industry is set to invest Rs. 58,000 crore (US$ 7 billion) to localize advanced components like electric motors and automatic transmissions, reducing import reliance and capitalizing on the ‘China Plus One’ trend. India’s competitive manufacturing base, with production costs 10-25% lower than those in Europe and Latin America, further strengthens its position as a global hub for auto component sourcing, strategically positioned near major markets including ASEAN, Europe, Japan, and Korea.
Shipping’s role in the EV future
The burgeoning electric vehicle (EV) market across Asia, particularly in India, positions shipping as a crucial player in the import and export of essential components. The demand for EVs is poised to support a robust sector in the region, even amid rising trade barriers globally. Asia’s critical role in providing battery components highlights the challenges of transporting these materials to markets within Asia as well as to Europe and the United States. Businesses face issues such as limited visibility, potential supply chain disruptions, and an increasing demand for sustainable logistics solutions.
As the global EV market is projected to expand ninefold, ensuring a seamless flow of components becomes essential. Shipping companies equipped with advanced logistics solutions—such as enhanced visibility through digital connectivity, flexible multimodal transport options, a strong global network, and strategic warehousing—can significantly facilitate this process.
The post A $1.3trn market opportunity drives into Asia appeared first on Energy News Beat.
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