In 2017, a news report got really popular. The study calculated that Indonesians spent 22 days of a year stuck in traffic jams. Jakarta was, at the time, considered one of the worst cities in the world when it came to gridlocks. The city dropped out of the gridlock list because of restrictions due to the pandemic in 2020. But as restrictions ease, congestion is rising again.

In comparison, the people of New York were stuck behind the wheel for over two days (2021) and Bangaloreans spent just over 10 days gridlocked (2019).

Jakarta could experience further pain. According to reports, there are 87 cars per 1,000 people in that country. To get a full picture, let’s zoom out to the region. 99 in every 1000 people in Indonesia own a car, compared to 275 in Thailand and 490 in Malaysia. Therefore, we see that the region is at a unique point in its history. The GDP per capita is rising, and people want to buy cars. But vehicles cause gridlocks, which cause damage to the environment. And as these cars inch forward, they burn valuable oil.

The countries have tried several solutions. The likes of Manila and Jakarta, for example, tried an odd-even experiment. This experiment rations the number of vehicles that could be on the street. But it didn’t help. The travel times increased as alternate modes of transportation were not available or reliable. So what did people do? They bought more cars. Currently, the people of ASEAN use cycles, tuk tuks, cars, buses, trains, and ferries to get from one place to another within a city. Most of these run on internal combustion engines and belch greenhouse gases into the atmosphere.

The only way to solve this problem is to be greener with public transport and private vehicles.

One way of going green is to swap out internal combustion engines with electric and hybrids. Countries have encouraged large auto manufacturers to set up bases in member nations. The governments are enticing customers by offsetting the slightly higher prices of electric vehicles (EVs). But a lot more is needed.

For EVs to truly take off, countries across the globe will need to solve two major challenges. Make these cars affordable and make infrastructure available.

How ASEAN solves the car problem

Thailand has positioned itself as an EV hub. The country’s National Electric Vehicle Policy Committee has set a target to have EVs account for 50% of Thailand’s auto manufacturing by 2030.

As early as 2019, Japanese carmaker Toyota had said that Thailand will be its production base. The company is also investing US $300,000 for the EV scheme in the country. Recently, Thai energy company PTT signed a US $2 billion deal with Foxconn to make electric vehicles. Under the agreement, 50,000 vehicles will be manufactured initially, with an upper limit of 150,000 annually.

Apart from Toyota, China’s Great Wall Motors has also set lofty targets for the Thai market. It plans to launch nine EV models in three years. In November 2020, the Thailand Board of Investment (BOI) approved the rollout of a comprehensive set of incentives. This covered all major aspects of the EV supply chain, with a focus on battery electric vehicles (BEVs) and local production of critical parts. Further, on February 21, 2024, Thailand’s National Electric Vehicle Policy Committee (EV Board) approved new measures to support the uptake of electric buses (e-buses) and electric trucks (e-trucks), along with the establishment of battery bases.

The joint venture (JV) between Florida’s e-mobility firm Evlomo Incorporated and Rojana Industrial Park will build an 8GWh lithium battery plant in Thailand. The companies will invest up to $1.06 billion through a new JV company. Rojana is a joint venture between Japan’s Nippon Steel and Sumikin Bussan Corporation, and Thailand’s Vinichbutr’s Group. With the billion dollar Lithium-Ion factory also underway, Thailand is quickly rising up the EV ranks.

Indonesia isn’t too far behind. Hyundai Motor and LG Energy Solution have begun the construction of an US $1.1 billion EV battery plant in the country. It will have a peak capacity to power 150,000 BEVs every year.

Philippines and Vietnam play catch up

A research paper by Eco Business said that the Philippines has pledged to cut greenhouse gas emissions by 75% from 2020 to 2030. Simultaneously, policy decisions have also been taken to build EV charging infrastructure in the country. In addition, Swiss firm ABB is offering technology solutions to the country for this purpose.
As the country is going cleaner and greener, there is interest from companies in the United States as well. A report from the US commerce department body said that a majority of EVs in the country are tricycles taking passengers between short distances.

However, the market potential is huge. It is estimated that the revenue from EVs will touch US $33.6 million by 2024, a growth of 12% on an annual basis.

While Vietnam is not a big name in the EV space yet, the government is taking the incentive route to make the vehicles popular. It also wants to reduce CO2 emissions by 8% by 2030. Here, EV usage will play a crucial role.

Enter ride hailing companies

Mobility-as-a-service or MaaS is the buzzword in Southeast Asia. Car ownership is being replaced by ride sharing with players like Gojek and Grab dominating the market. AirAsia Ride is a new entrant to the MaaS market. And MaaS firms want to turn electric too.

As early as 2018, Grab had made plans to go green. In 2021, it tied up with Hyundai Motors to boost EV adoption in the region. Taking it a step forward, Grab is also offering an option to choose between electric and hybrid. Riders can also pay extra to contribute to eco-friendly projects.

Similarly, ride-sharing app Gojek wants to shift to EVs by 2030 completely. It began testing its EVs earlier this year. This will make all vehicles available.

How ASEAN could solve the infrastructure problem

One of the largest problems in adoption of EVs is infrastructure. Because there isn’t enough infrastructure, people tend not to buy these cars. And because not enough people buy them, the infrastructure doesn’t get built.

A 2019 report by RMI said that costs for charging infrastructure components ranged from US $2,500 up to US $7,210 for a Level 2 commercial charger and from US $20,000 up to US $35,800 for a 50-kilowatt DC fast charger.

But as volumes go up, costs come down. According to the report, the average installation cost for a commercial Level 2 charge port is US $4,173 for a single charger. Add a second charger at the same site and the per-unit cost falls to US $3,367. Install six or more charge ports and the per-unit cost drops to US $2,638.

For countries such as Indonesia, these costs aren’t prohibitive. Indonesia recorded US $3,869 GDP per capita in 2020, despite the lockdown. The ability to spend in the country is higher.

Countries around the world approach the infrastructure problem in different ways.

In India, the government is relying on private companies to build infrastructure. Ola, India’s equivalent of Didi Chuxing, has promised to build 100,000 charging stations across 400 cities and towns to support EVs. Larger companies, such as Tata Motors, have also set up charging stations with their dealership. The company has set up 500 charging stations across 100 cities in India. Meanwhile, Uber is planning to introduce 3,000 EVs into its fleet in the country. But despite all of this, India is still cold towards EVs. And one of the primary reasons is money. India’s GDP per capita is ~ US $1,900. The ability to buy even the cheapest options, such as Ola’s scooter, is low. The Indian government has spent just about US $118 million on charging infrastructure so far.

The big shift in Western markets

But things are different in the West. Europe holds a 26% market share in EVs. A McKinsey report said that Europe sold 590,000 EVs in 2019. This increased by 25% in the first quarter of 2020.

In the United States, EV sales dropped by 12% in 2019 to 320,000 units. It declined by another 33% in the first quarter of 2020. But the launch of Tesla Model 3 is helping sales pick up. US President Joe Biden’s $2 trillion infrastructure plan has a large part dedicated to EVs. The US plans to spend close to US $50 billion on charging infrastructure and plans to build 500,000 charging stations.

The thrust in these two regions is to have a connected EV infrastructure. A report by Berg Insight said that Europe and North America will increase the number of EV chargers by 38% between 2020 and 2025. This translates to 7.9 million charging points.

Today, it is not just the automotive companies eyeing the charging space. Energy companies such as Shell and BP have also entered this segment. Charging infrastructure company NewMotion is owned by Shell, while BP owns the EV charging firm BP Pulse.

How soon the fossil fuel enthusiasts make the switch to electric vehicles and how efficient the charging equipment is will decide the success rate of ASEAN’s EV push.