Why Entrepreneurs are Key to Mass Adoption of Electric Mobility in Asia
For the mass adoption of electric vehicles in Asia to really take off, we need to look into the region's entrepreneurs to make it happen
Throughout Asia (and the world) we are seeing a massive, concerted push by governments to drive the mass adoption of electric vehicles. Motivated by the impending threat of climate change, pollution and a desire to wean themselves off oil imports, governments from India to Indonesia are implementing new regulations, incentives and subsidies to encourage the use of electric vehicles (EVs).
However, despite this, EV adoption has been slow. A recent report by Bain & Company states that the mass adoption of EVs in Asia will not happen until at least 2025, despite significant investments being made in this space.
There are numerous reasons behind this, but the main issue faced by policymakers is the "chicken and egg' challenge posed by infrastructure. Consumers simply won't purchase and use an electric vehicle unless they know they can charge them quickly and easily. This requires a comprehensive charging infrastructure in place that at least equals that of traditional petrol stations, yet without enough EV users paying to charge their cars, these charging stations will not be profitable — so investors will not build them.
Governments have tried to step into this gap to boost the adoption of electric vehicles. In India, the government-owned Energy Efficiency Services are looking to install 10,000 charging stations over the next two years. On the other hand, the government of China has already built 412,000 charging stations to date.
Yet the reality is charging infrastructure is challenging, disruptive and hugely expensive. Land needs to be purchased at the right locations, new cabling needs to be installed and space needs to be allocated. We need to look beyond the top-down, government-led approaches that are being implemented and look towards the region's entrepreneurs who have the potential to significantly expand the number of charging stations in Asia at limited or no cost to the taxpayer.
Firstly, we should accept that the road to mass consumer adoption lies in the commercial sector. Electric vehicles are still too expensive for the average consumer who will use them not to make money but for convenience. Many SMEs, meanwhile, use their vehicles as part of their business plans and so if we can find a way to make electric vehicles profitable then demand for electric vehicles will rise.
We can make it profitable by providing affordable electric vehicles, but also by empowering entrepreneurs to profit from the charging infrastructure, thereby encouraging them to build their own charging ecosystems.
Let's start with the logistics sector, such as a local warehouse that delivers goods via vehicle to nearby customers. If we allow them to build their own charging stations, then they could charge their own vehicles while they are being loaded with new goods. Once the deliveries have been made, the vehicle will return and the cycle would start over.
So far so good. But what would be a real game changer is if that same warehouse was able to allow nearby businesses to charge their electric vehicles using their charging stations, thereby making an additional income. Now, the same charging station would become a revenue generator, in turn encouraging others to invest in their own charging stations.
Importantly, many of these businesses are located near each other, usually in clusters, and so the charging stations would be positioned where they are needed. We can extend the same concept to other sectors, such as restaurants who offer food delivery services, retailers delivering products to consumers etc. The promise of additional revenue will be enough to drive investment in charging infrastructure independent of government and the taxpayer.
As we start seeing the emergence of more charging stations and a proper charging infrastructure, as well as successful use cases of companies using electric vehicles (as well as a reduction in price of both the vehicles and charging), consumers will start to latch on.
Technology already exists thanks to ultracapacitor batteries that allow vehicles to charge in minutes, not hours, so the only thing holding us back from an electric vehicle future is the underlying infrastructure. Entrepreneurs have a habit of finding opportunities where others see nothing but challenges, they could also point us to the solution.