The employees will work in the Tesla Gigafactory in Shanghai, East China on November 20, 2020.
Ding Ting | Xinhua News Agency | Getty Images
China is the largest player in the Asian electric vehicle market – but the region still lags behind Europe, according to an analyst from research firm Fitch Solutions.
Asia is falling behind Because European governments are taking strong measures to stimulate the growth of the sector, Anna-Marie Baisden, head of automotive research at Fitch Solutions, said in an interview on CNBC’s “Squawk Box Asia”.
“The region is catching up. When we talk about the Asian EV market, we mostly talk about China, which still accounts for around 90% of sales,” said Baisden.
“But there are a lot of supportive measures that have been put in place in Europe, especially the EU, in response to the coronavirus over the past year … both on the infrastructure side and nationally in terms of incentives,” she said.
A report from Cairn Energy Research Advisors, a consulting firm with a focus on the battery and electric vehicle industry, forecast last year that sales of electric vehicles will increase in 2021. It is coming Countries around the world are pushing for new programs to encourage consumers to buy battery-powered vehicles.
The report also said that The largest growth in sales for this sector is coming from Europe, mainly as EU governments are working to reduce carbon emissions.
Challenges for Japan and India
Baisden said the weak acceptance of electric vehicles in Asia – mainly in countries like Japan and India – was due to a combination of factors.
While there is demand in Japan, “we are still waiting for concrete incentive plans,” she pointed out. “We learned in January that there are plans to create financial incentives for purchasing at the local level, particularly with the goal of having all electric car sales by 2030.”
In India, the electric vehicle sector is likely to receive a boost from Elon Musk’s electric car maker Tesla.
It has a much lower median income than the other Asian markets. There’s a lot of potential there, but it really comes down to India’s demographics.
Head of Automotive Research, Fitch Solutions
According to Reuters, the US company founded Tesla Motors India and Energy Private Limited in February, based in the tech center of Bengaluru in Karnataka.
While the largest economy in South Asia offers tremendous growth potential in the electric vehicle market, the country’s demographics could pose a serious challenge, according to Baisden.
“The supporting guidelines are in place and manufacturers are starting to move in that direction with locally produced cars. But the demographics are different,” noted Baisden.
“It has a much lower median income than the other Asian markets. There is a lot of potential there, but it really comes down to India’s demographics,” she added.