Asia’s EV supply chain drive in mass adoption pose challenges
13 Mar 20235 min read
Summary
- The article describes how Asia’s electric-vehicle (EV) supply-chain expansion is crucial to driving mass EV adoption, with an emphasis on localising production, scaling battery manufacturing and leveraging regional mineral resources.
- It also highlights key challenges such as underdeveloped charging infrastructure, the high total cost of EV ownership and gaps in after-sales services and battery-recycling systems across many Asian markets.
- The piece concludes that strategic coordination across industry, government and infrastructure players is essential to overcome these barriers and to convert supply-chain momentum into sustainable EV market growth.
Shifting from gasoline-powered vehicles may seem far-flung before in Asia, but the roll-out of electric vehicles (EVs) has now become a significant supply chain drive in the continent.
Based on the Global Electric Vehicle Outlook of the International Energy Agency (IEA), about 16.5 million electric cars are in roads across the world. Such is the case in 2021 and it has tripled compared to 2018. Half of the said number is from China.
Although most mature auto markets experienced double-dips in sales in 2021-2022. EV sales still outperformed by 21% in Europe, 87% in China, 55% in Northern America, and 78% in non-triad economies.
The adoption of EVs is a crucial supply chain drive in Asia. It was being encouraged by both the government and private sectors. Despite this, the electric vehicle supply chain has to face significant challenges as a budding industry.
Battery supply and its parts
The battery is the most costly part of the EV supply chain modeling structure. It accounts for around 40% of an EV's entire price.
Since lithium-ion batteries are light, compact, and have a large energy capacity, EVs mostly have them. Lithium, nickel, and cobalt are crucial raw elements for producing these batteries.
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"Policymakers, industry executives, and investors need to be highly vigilant and resourceful to reduce the risks of supply disruptions and ensure sustainable supplies of critical minerals," said Fatih Birol, Executive Director at the International Energy Agency.
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