The production hub shift: From conventional car to EV manufacturing in Asia
27 Mar 20238 min read
Summary
- The article discusses how Asia is transitioning from conventional car manufacturing to becoming a global production hub for electric vehicles (EVs), leveraging its strong industrial base, access to key materials and integrated supply‑chains.
- It underscores that this shift is reshaping regional automotive ecosystems as EV production requires new components, battery systems and assembly practices, calling for substantial investments and strategic partnerships.
- The piece warns that companies must act swiftly to align with this transformation because lagging in adapting to EV manufacturing models could cost them market relevance and competitive positioning.
As Asia’s automotive industry transitions, the shift will transform the production hub arena and determine how transportation will change in the future. Said move was steered by the fact that the transportation industry accounts for 17 percent of global greenhouse gas emissions.
Asia's automotive industry in select countries has been gradually shifting focus to EV manufacturing. It paved the way to establishing a stringent number of EV production hubs across Asia as vehicle parts manufacturers and comprehensive ecosystems lean toward electric technology.
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"According to Counterpoint’s Global Passenger Vehicle Forecast, the SEA market of electric vehicle ecosystem is expected to grow at a fast pace, and by the end of this decade, EV sales are expected to cross the 3.5 Million mark at a CAGR of 124%,” said Senior Analyst Soumen Mandal.
Mature markets like China, Thailand, and Japan are leading the EV adoption curve in the auto industry supply chain. However, emerging economies are still lagging. Nonetheless, certain Asian countries are underway in progressing the EV industry.
Southeast Asian countries promote EV growth through financial incentives, energy security-related efforts, infrastructure development projects, and industry partnerships. For example, Thailand identified the "Next Generation Automotive" as one of its 10 S-Curve Industries and reduced taxes and duties on imported EVs.
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