The electric vehicle (EV) market in Asia will continue to grow at a fast pace on the back of more companies in the region supporting the uptake on EVs, says Fitch Solutions in a June 20 report.
On this, the team at Fitch Solutions has estimated that EV sales in Asia will grow by 78.1% in 2021 from an estimated growth of just 4.8% in 2020.
In addition, the team predicts that total EV sales in Asia will reach a high of just under 10.9 million units by the end of 2030, up from an estimated sales volume of 1.4 million units in 2020.
Amongst the countries in the region, Fitch Solutions believes that the Chinese EV market – which is the first economic power to drive the adoption of EVs – will remain the largest in the world till the end of its forecast period from 2021 to 2030.
The majority of demand for EVs will also stem from China, Japan and South Korea, the three most advanced economies in Asia says the team at Fitch Solutions.
China will account for 90.75% of the region’s sales, followed by South Korea’s 4.2% and Japan’s 2.8%.
However, the team adds that it sees China’s market share in the EV industry in Asia dropping more steadily as other countries step up in terms of purchasing EV incentives and adopting carbon-neutrality targets.
To this end, it foresees China’s EV market to fall to 88.7% of the region’s EV sales.
South Korea’s EV sales will increase slightly to a market share of 6.3%, while New Zealand’s EV sales will take third place with a regional market share of 1.9%, surpassing Japan.
New Zealand’s EV sales is said to overtake Japan by 2028, although if the Japanese government begins offering incentives, the Japanese EV market is likely to take second place in Asia in terms of annual EV sales.
That said, China’s EV market, which is currently in the lead by leaps and bounds, will continue to grow.
This is due to the shrinking price difference between EVs and internal combustion engine vehicles (ICEVs), as well as the growing number of first-time vehicle buyers opting to buy EVs thanks to the Chinese government’s subsidies and fewer regulatory hurdles involved in buying and owning EVs.
In China, the team at Fitch Solutions forecasts that growth in China’s EV sales will accelerate 83% y-o-y in 2021, following an estimated growth of 3.6% in 2020.
In the longer term from 2020 to 2030, Fitch estimates that the country’s EV sales will average annual growth of 18% to reach an annual sales volume high of just over 10 million units by 2030, compared to an annual estimated sales volume of 1.3 million in 2020.
Currently, the team expects sales to reach an annual average growth rate of 14.9% between 2021 and 2025 to reach a sales volume of over 2.25 million units, representing an EV penetration rate of 8.7% by the end of 2025.
In South Korea, the team forecasts sales to grow by 48.6% y-o-y to reach an annual sales volume of just under 75,000 units in 2021 and an EV penetration rate of 4.22%.
“Over the long term, we believe that South Korean EV sales will continue to grow as the government further incentivises sales by offering scrappage incentives, extending EV subsidies, implementing a carbon tax and potentially limiting the use of internal combustion-engined vehicles,” writes the team.
EV sales in South Korea are expected to reach average annual growth of 26.3% over 2021 to 2030 to reach an annual sales volume high of around 500,000 units by end-2030.
The Singapore government, which is seeking to accelerate the development of its EV-charging infrastructure in the country, may see EV sales expand by 170% y-o-y in 2021 to reach an annual sales volume of just 475 units, compared to a 73% y-o-y decline in EV sales in 2020.
“Thereafter, we expect EV sales to continue to grow at an average annual rate of 40% y-o-y over 2022-2030 to reach an annual sales volume high of just under 7,000 units and an EV-penetration rate of around 9.6% of total vehicle sales,” writes the team.
“That said, we note that there is room for stronger growth given the wealthy population, especially as the cost of EVs moderates in Singapore and as the cost of ICE-vehicle ownership rises,” it adds.
Photo: Bloomberg
