Expanding Electric Vehicle Sector in Developing Countries

Emerging Market and Developing Economies (EMDEs) have seen a significant surge in electromobility, with countries like Thailand and Indonesia leading the charge.

In Thailand, the Ora Good Cat BEV model from Chinese OEM Great Wall Motors became the most sold electric car in 2022, with nearly 4,000 sales. This success comes as electric car sales in the country doubled to 21,000 in the same year. Interestingly, the Chinese automaker BYD sold the most electric vehicles in Thailand in 2022.

Thailand's growth in electromobility can be attributed in part to the Thai government's financial incentives for electric cars. These incentives include subsidies, excise duty waivers, and import tax reductions.

Meanwhile, in Indonesia, electric car sales multiplied more than 14 times in 2022, exceeding 10,000. The Indonesian government has responded to this growth with new incentives announced in March 2023. These incentives aim to support the sales of electric two-wheelers, cars, and buses in 2023, with the government aiming to subsidize the sale of 200,000 electric two-wheelers and 36,000 electric cars.

Indonesia's top EV company by revenue, Ola, is also expanding its operations. Ola plans to double its electric two-wheeler manufacturing capacity to 2 million by the end of 2023. The company also plans to build lithium-ion battery manufacturing facilities, initially with a capacity of 5 GWh, aiming to scale up to 100 GWh by 2030. Ola also plans to start marketing electric cars for its taxi business by 2024 and make its fleet of taxis fully electric by 2029.

The Indian market is also booming for electric vehicles. BEV sales reached nearly 50,000 in 2022, a 4-fold increase from 2021. The Indian government's Production Linked Incentive (PLI) scheme has attracted USD 8.3 billion in investments for EV and component manufacturing. Ola, India's top EV company by revenue, is also planning to scale up its operations, aiming to reach an annual production capacity of 10 million between 2025 and 2028.

However, the Indonesian government did not announce incentives for electric buses in their March 2023 announcement, and the details of the new incentives for electric two-wheelers, cars, and buses in 2023 remain unspecified.

One factor that could be contributing to the growth of electromobility in these countries is the competitive pricing of electric vehicles. Chinese automakers in Thailand, for example, undercut EV prices compared to foreign competitors, such as BMW and Mercedes, broadening their consumer base.

The Indonesian government also aims to strengthen domestic capacity in EV and battery manufacturing through local component requirements. This move could further stimulate the growth of electromobility in the country.

In conclusion, EMDEs are seeing a significant increase in electromobility, with countries like Thailand and Indonesia leading the way. Financial incentives, competitive pricing, and a focus on domestic manufacturing could contribute to the continued growth of electromobility in these countries.