Southeast Asia has been busy the past few weeks, with several high-profile international conferences taking place in Bali, Bangkok and Singapore. After a nearly three-year lull triggered by Covid, the region is buzzing again as countries lift virus restrictions and encourage face-to-face meetings.
For Vivek Lath, a partner at McKinsey & Company, one more thing stands out. At this year’s G20 summit, held on the tropical resort island of Bali, several companies provided electric two-wheelers to transport attendees from their hotels to the main convention centre. Local police also escorted the delegates on electric scooters. Rice sees this as evidence that the electric vehicle revolution is taking off in Southeast Asia — albeit on two wheels.
“Many companies are realizing that electric two-wheelers will be adopted first in this part of the world,” Rath said in an interview in Singapore on Friday. “It’s a segment that’s going to accelerate.”
In fact, owning a smaller car makes more sense in crowded Southeast Asian cities from Hanoi to Jakarta. For the burgeoning middle class, electric vehicles are also more affordable, given that their cost remains relatively prohibitive.
Lath’s colleague and McKinsey partner Rahul Gupta reckons electric two-wheelers could account for 50% of the region’s entire motorcycle market by 2030, compared with as little as 20% for cars.
Countries like Indonesia and Vietnam — already big markets for scooters and scooters — will drive the growth, Gupta said, especially as last-mile delivery companies like Grab and GoJek pledge to shift their fleets entirely to electric vehicles in the case of.
State-owned electric vehicle maker Indonesia Battery Corp. plans to produce 50,000 battery packs for two-wheelers next year to support the roughly 115 million motorcycles it expects to end up on the country’s roads.
India’s Hero MotoCorp Ltd., the world’s largest two-wheeler maker by sales, launched its first electric scooter under its Vida sub-brand last month. A neat feature for neighborhood excursions is the limp home safety feature, which limits the scooter’s top speed to 10km/h, allowing it to go 8km on a nearly depleted battery.
Even companies from developed markets in Asia are getting in on the action. Japan’s Honda Motor Co. is doubling down on plans to launch electric motorcycles, aiming to introduce at least 10 models globally by 2025.
Population and urbanization growth trends are supporting two-wheeler sales in developing countries, BloombergNEF wrote in a June report.
“As urbanites become wealthier, they will continue to spend more on transportation, while those living in congested areas with underserved public transportation will continue to find two-wheelers a better fit than passenger cars,” the analysts wrote. Congested streets,” adding that, unlike passenger cars, newer gas-powered two-wheelers have not shown significant improvements in fuel efficiency over time.
“In the U.S. and Europe, a big part of two-wheeler sales is usually enthusiasm,” Lath said, “and in Asia, it’s actually a daily demand. A big part of the last-mile connection depends on the two-wheeler- Not just moving goods, but taking people from one point to another. That doesn’t happen anywhere else in the world.”
First published date: November 21, 2022 at 17:27 PM CST