The Rise of Electric Vehicles in China

China has become the world's largest auto market and is making huge strides in electrifying its vehicle fleet. With air pollution a serious issue in many Chinese cities, the government has implemented strong policies and financial incentives to support the adoption of electric vehicles (EVs). This includes significant tax breaks for consumers who purchase EVs along with the requirement that a certain percentage of automakers' sales come from new energy vehicles.

As a result of these measures, China has more EV models available than any other country. Several Chinese automakers like BYD Auto and SAIC Motor have successfully transitioned to producing large numbers of EVs and plug-in hybrids. Ride-hailing giant Didi Chuxing also has plans to electrify most of its fleet by the next decade. With continued government backing, analysts predict EVs could account for 25% of new car sales in China by 2025.

Fuel Cell Vehicles in Japan and South Korea

While battery-powered Asia (Japan, South Korea, China, India and ASEAN) Fuel Efficient Vehicles  have gained the most attention, Japan and South Korea have put substantial R&D into hydrogen fuel cell technology. Led by Toyota, Honda, and Hyundai, the fuel cell vehicle (FCV) operates using hydrogen as fuel and emits only water vapor from its tailpipe. Both countries see ample opportunities for building out a hydrogen refueling network and exporting FCVs and fuel cells globally.

On the roads, models like the Toyota Mirai and Hyundai Nexo are already available for lease, though high purchase prices remain an obstacle to mass adoption. Still, Tokyo hosted the 2020 Olympics with the goal of showcasing Japan's advances in hydrogen technologies. Korea as well has invested billions to deploy hydrogen buses and trucks while incentivizing consumers to buy FCVs. Their efforts could pay off if hydrogen infrastructure expands and costs decline over the long run.

India's Electric Mobility Push

With devastating levels of air pollution in major cities and growing concerns over energy security, India recognizes a need to promote more sustainable transportation. With close to 2,000 EVs already on sale in the country, original equipment manufacturers (OEMs) like Mahindra, Tata Motors, and MG Motor India are engineering affordable electric cars, buses, scooters, and three-wheelers.

At the same time, the government is implementing the FAME II program which earmarks $1.4 billion to incentivize new EV purchases and develop a domestic charging network. India also aims to transition 30% of its automobile fleet—for both private and commercial use—to electric by 2030. Reaching this target will depend on adequate charging options and bringing EV costs down to parity with gasoline models over the next decade.

Growth of Hybrids Across ASEAN

Countries throughout Southeast Asia have seen hybrid vehicles grow in popularity as well. In Thailand, Toyota introduced its first mass produced hybrid, the Camry, over 15 years ago and remains the hybrid leader. Meanwhile, the Vietnamese government provides tax discounts for models like the Toyota Prius and Honda Jazz hybrid to reduce oil imports.

Other ASEAN nations are following suit, with Malaysia and the Philippines both introducing EV masterplans in recent years. These policies foresee incentives and standards to promote green cars and help meet emissions targets under the Paris Agreement. Hybrids offer ASEAN countries an opportunity to curb air pollution and lower carbon footprints incrementally as key infrastructure for fully electric driving expands in the coming decades.

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