Nissan launched its latest car, Leaf, in 2010. It was an all-electric car and widely regarded as the first full EV to hit the market. However, two Silicon Valley residents, Martin Eberhard and Marc Tarpenning, disrupted the EV market in 2003 after they launched their first EV, the Tesla Roadster. This car quickly gained traction. However, more importantly, it gained the interest of another Silicon Valley resident, CEO of SpaceX, Elon Musk. After Musk was onboard, Tesla started churning out more cars and started innovating at a higher pace than most of their competitors. As a result, the company cemented its name as the top EV company in the world.
After Tesla’s success in the States, Elon decided to expand and opened its first Gigafactory in Shanghai, China, in 2018. This decision signaled a seismic shift in the global electric vehicle industry. Now, Asia has become a dominant force in EV manufacturing. As per 2022 data, China accounted for the most EVs sold in the world, with a 58% share. Moreover, It accounted for a whopping 70% of total EV production. This shows just how dominant Asia has become in the global EV market. This success can be attributed to a plethora of things like the ‘Make In China 2025’ initiative and the subsidies offered by the Chinese government.
However, there are many reasons for this, which are not limited to China. For one, Asia produces 90% of all the batteries in the world. China, Korea, and Japan are the primary producers. China’s CATL and BYD dominated the global battery supply chain. According to SNE Research, China’s CATL held a 34% share in the battery’s global supply chain. Along with China, South Korean companies LG Chem and Samsung SDI, along with Japan’s Panasonic, also play crucial roles in the battery supply chain. These companies not only supply batteries to Asian automakers but also to international giants like Tesla, BMW, and Volkswagen, highlighting Asia’s integral role in the global EV ecosystem.
Japan exports battery technology and has the capability to make fully functioning EVs. It has some of the biggest and most innovative car companies in the world, including Nissan, Toyota, Subaru, Mitsubishi, and many more. Many Japanese car manufacturers, like Toyota and Nissan, already have their EVs, which are loved by many.
India is also not much behind. Although not a major manufacturing hub for gasoline cars or EVs, India has been investing in its infrastructure to become capable of manufacturing EVs. South Korean car manufacturer Hyundai has pledged to invest around $2.4 billion in India to make EVs in the country. Moreover, Hyundai will invest an additional $839 million in developing battery technology in India. Along with these international players, domestic car manufacturers like Tata, Maruti, and Mahindra are revamping their existing facilities for EV and battery assembly. Another driving factor is the global supply chain of semiconductor chips, which is heavily dominated by Asian countries. According to Statista, TSMC’s (Taiwan Semiconductor Manufacturing Company) share in the global semiconductor market is more than 60%, and China is also not very far behind. Moreover, the US is also pushing other ASEAN countries to manufacture semiconductors in their respective countries.
As cars become more technologically advanced, the need for semiconductors or circuits is greater than ever before. Moreover, EVs rely heavily on semiconductor chips to function properly. This is why Asia is dominating the EV landscape. It has everything it needs to transcend the industry: raw materials, technology, funding, batteries, and cheap labour.
China’s homegrown company, BYD, which is one of the top battery producers in the world, is also producing cars that are getting very good reception from various countries across the world, such as the US, India, and Japan. So, it is safe to say that Asia will be the dominating force in EV production in a couple of years. Even Elon Musk is looking to set up a few new factories in Asia in countries like India and Korea. At a convention, Elon Musk said, “South Korea remains a top candidate for Tesla’s next factory.” This shows that the richest man on the planet is more than looking forward to setting up his next Gigafactory in India.
