Guest blog: EV opportunities in East Asia
I’m a firm believer that China, Japan and South Korea are the future for next-generation electric vehicle (EV) technologies – presenting big opportunities for western firms offering cutting-edge technologies.
Firstly, let me outline the key technologies driving the Asian EV revolution:
Charging & battery as a service (BaaS). EV charging infrastructure is proving a headache in Asia, as is Demand Response and easy, safe payments. Many OEMs are looking at battery swapping.
Battery management systems (BMS) supporting state of everything (SoX), which extend EV range and reduce battery degradation. They’re generally embedded at the battery pack makers or further downstream at tier-1s or OEMs.
Advanced battery materials, which increase the energy density and safety of batteries and can reduce costs and the need for environmentally-unfriendly substances.
Thermal management systems & materials are critical to keep EVs charging and operating at the right speed, particularly during extreme weather.
And finally, reuse and recycling are important as EV batteries can have second-life applications such as commercial energy storage, and key materials including lithium, nickel and cobalt can be reclaimed.
So, what are the tech trends and needs in each of the main East Asian markets?
China is the world’s largest EV market, with more than three million new energy vehicles sold in 2021 - half the global total! It’s also leading the charge on EV batteries, with CATL and BYD producing 42% of global output in 2021.
Downstream, China has a deep heritage of Sino-western OEMs leading domestic sales, which can facilitate faster deals for companies already supplying the mothership. However, EV upstarts like Nio, Xpeng and Li Auto are chipping away at market share.
China continues to outsource advanced materials research and the provision of charging infrastructure, though the country has 2.2 million charging stations compared with 120,000 in the US. And high-end Chinese EV OEMs are eyeing lucrative European and North American markets and looking for local partnerships there.
Japan is targeting carbon neutrality by 2050 and a 46% reduction in emissions from 2013 levels by 2030. And the government has asked the auto sector to step up to the challenge by requiring all new cars to be eco-friendly by 2035.
But today, Japan lags China as just 1% of auto sales were EVs in 2021, presenting opportunities for western technology providers.
And the country lacks EV charging infrastructure, with Japanese energy providers including Tepco looking at new solutions.
Furthermore, Honda has announced an EV partnership with Sony, and the latter will almost certainly look to global startups. And Japan is exploring battery recycling, with Sumitomo Metal bringing a facility online next year.
Hyundai-Kia has sales targets of nearly two million EVs by 2030 and is allocating 20% of its 95.5 trillion KRW (£59 million) R&D budget to charging infrastructure, battery maker alliances and EV production.
Furthermore, Korea is home to LG Energy Solutions, Samsung SDI and SK On - the world’s second, fifth and sixth largest EV battery makers. And they’re interested in new materials, recycling, and carbon reduction throughout the battery lifecycle.
Korea’s charging infrastructure is still in its infancy and is expected to become more fragmented with new market entrants, requiring solutions such as the eRoaming services provided by our new client Hubject.
And other solutions attracting attention in Korea include charging management systems, smart charging tech, V2G systems, Plug & Charge and wireless charging.
So, Asia presents rich opportunities for cutting-edge EV tech companies willing to invest in a market presence. They’re not necessarily easy markets to crack, but Asia is where the action is, and the potential rewards are considerable.
Thomas Shiekman is a lead member of Intralink’s Automotive & Mobility Practice. He has worked in Asia for the last 15 years, helping western tech firms succeed in China, Japan, South Korea and Taiwan.
For guidance on your prospects in Asia, you can reach him at [email protected]
Intralink is an international business development consultancy which helps western tech firms expand in East Asia. You can find out more about Intralink’s automotive work on its website and follow its LinkedIn page.
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