From Europe to South East Asia : The Great Journey of Electric Vehicles

The uptake of Electric Vehicles may have been slowed by difficult economic conditions, but manufacturers are gradually introducing new models to encourage more consumers to take the plunge. Europe currently offers the most choice, while domestic manufacturers in the USA and China look set to shake things up. While many city-dwellers are becoming more accustomed to seeing - and travelling in – hybrid cars, it’s still rare to see pure electric vehicles on the road.  Thanks to the efforts of both big name car manufacturers and new players such as Tesla, consumers have a better understanding of the advantages and challenges associated with electric powered cars. Public opinion about EVs is mostly positive. For example, a recent survey by the American Energy Alliance examining voters’ attitudes towards government initiatives that included support for EVs found that half of the respondents agreed that electric cars “are better for the environment than gasoline-powered cars” and that 80% think that EVs are cleaner than traditional cars3.

Despite increasing awareness and a generally positive perception of EVs, many consumers are still waiting. Macroeconomic factors and infrastructure challenges play a large part, but there is also a lack of choice. The total number of pure electric and plug-in hybrids cars available right now doesn’t exceed 70. That’s a low number compared to the huge variety of petrol cars on the market, but it should grow in the coming years as prices come down, more efficient batteries become available and tighter emissions regulations for the car industry take effect (especially in the EU). At present, the majority of electric vehicle options are based on existing models, such as the Volkswagen e-Golf. Electric-only models such as the Nissan Leaf account for 40% of total EV models.

The European market currently offers the most choice to consumers considering the switch to an electric car.  According to a survey undertaken by Deloitte in 2011, 44% of respondents in the UK said they were unlikely to consider an EV. But things have changed in recent years. In a more recent study conducted by the UK Government, 81% of young people asked about EVs said that they would consider this type of vehicle first when buying their first car4. Other reasons for the European surge include high fuel costs, higher levels of regulatory intervention to encourage uptake, and a highly urbanised population.

In 2013 there were 34 brands offering 52 different electric passenger car models in Europe. One year later the number of models jumped to 62, a significantly bigger range than the USA (16 brands and 23 models). This offer was composed of 45 pure electric cars and 20 plug-in hybrid electric models. One of the biggest shifts came from Asian car makers such as Mitsubishi and Kia, but European players, including the German manufacturers, also made inroads. For example, in 2014 Volkswagen introduced the plug-in hybrid and full electric versions of its popular Golf along with the Audi A3 plug-in hybrid; BMW unveiled the i8 sportscar, Mercedes added the plug-in hybrid version of its flagship S- Class, and Porsche revealed the Cayenne S E- Hybrid. However, the SUV offering remains limited. By the end of 2014 there were only 2 in the list: the Mitsubishi Outlander and the Porsche Cayenne. This goes against the overall market trend which is seeing SUVs becoming more and more popular.

The wider range of EVs available in Europe reflects the European Union’s commitment - and those of its individual member state governments - to create the best market conditions for this technology to thrive. This is being achieved by working with the private sector on a range of financial, infrastructure and R&D initiatives. By 2013 more than 10 European countries had introduced special measures targeted at EVs. Some funded tax breaks or rebates to make EVs more financially appealing. Other incentives included public funding to support the installation and construction of charging points and public awareness projects.

Due to its nature and its consumer tastes, the North American car market (excluding Mexico) continues to be dominated by larger vehicles and SUVs. As a result, there is a smaller range of EVs currently available as many of the most successful models in Europe and Asia are compacts that aren’t as well suited to the longer distance travel often required in the more expansive North American countries. In fact, range is one of the biggest challenges facing pure electric cars in the USA and Canada. With less financial incentive, it’s no surprise that consumer habits have been slow to change. Big SUVs and trucks powered by gasoline engines are still among the best-selling vehicles in USA and Canada and this has a knock-on effect on the range and availability of EV models.

In 2013, there were only 15 different models powered by electric engines and plug-in hybrids on the market. The number grew to 22 the year after, and has since declined to 20 as of September 2015. The decrease is in line with total sales performance, which suffered due to the increasing popularity of traditional SUVs and trucks. This is clear when looking at the availability of SUVs and trucks with alternate drive trains – none of GM, Ford, Toyota and Fiat Chrysler feature either an electric SUV or truck in their line- ups. This is particularly significant given that the USA is the world’s largest market for these types vehicles. However, North America is also home to some of the most innovative technology companies that are determined to change the status quo. Amongst these is Tesla, which looks set to shake things up with the launch of its Model X crossover next year. With prices expected to start at $136.500, it is unlikely to become a mass-market product, but it could nonetheless create the room for other manufacturers to follow its lead.

China’s huge domestic brands want to join the EV party too. According to JATO Dynamics volumes data, there were just 12 different models on sale in 2013. As of August 2015, the total had risen to 19, of which 11 belonged to Chinese brands. However, the overall offer remains limited considering the size of the Chinese market. Volkswagen, the country’s leading brand, offers only 2 models from its huge range of cars, while other big players are yet to launch an EV model. The situation in Japan isn’t too different. As you might expect, the EV market is dominated by local brands, but again the range of options available to consumers are is limited – as few as 14 different models. This is also the case in South Korea (with Kia and Samsung on the list) and in Australia, where the options are limited to a number of European or Japanese-made cars. EV adoption in other large markets such as India and Thailand is yet to take off.

It will be very interesting to see the great journey of Electric Vehicles, especially to see how they finally can make significant impact in South East Asia region in the future. Does electronic vehicles will mark its success story in this one of most tough, unique, and interesting region for Automotive Industry or will be suffered before even growing? We'll see together

By JATO Dynamics.