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This is a part of the EV Innovation Intelligence series

Depending on who you are, electric vehicles might either be viewed as a rich man’s vehicle, an avenue that can perhaps make a serious difference to transport CO2 emissions, or as an exciting business opportunity.

There are different takes on electric vehicles, depending on which country and region one is looking it, and depending also on the target segment.

Based on the insights I and my team gathered while working on the EVI2 (EV Innovation Intelligence) global guide, here are some inputs on why electric vehicle could mean quite different things for different countrymen, and as a result the adoption of electric vehicles could differ vastly among countries.

Even though it might sound obvious, it still is useful to point out that electric vehicles are more than electric cars, scooters and bicycles – there are electric buses, vans, trucks, three wheelers (tuk-tuks), golf cars, and veering towards the exotic, even electric boats and ferries, not to mention electric aircraft.

The fact that there are so many different types of electric vehicles, and the added fact that there could be further customizations possible in the electric vehicles for specific market segments, will make it clear that EVs could be looked at completely differently by different end user segments.

But let me go a bit deeper, and consider how EVs could be looked at differently depending on the economic standing of the country, by looking at three different types of economies:

  • Developed
  • Developing
  • Under-developed

Developed countries

Electric vehicles got their start in these regions. Norway for instance, has over a third of vehicles sold as electric vehicles. Not surprisingly, companies such as Tesla with their premium EVs have made significant inroads into Norway.

Toyota has sold almost fifteen million electric vehicles mostly in developed nations (though in the form of hybrid electric cars).

For most developed countries, electric vehicles are an aspirational product for the B2C segments – testimony is the Tesla cars that are selling at 4-5 times the prices of mass market cars. While the mass market electric cars will surely make their entry sometime soon, electric vehicles in the developed countries are not trying too hard to win the price sensitive market segments, at least not now. Most of their current products are thus designed to satisfy such aspirations.

The other aspect that drives electric vehicle production and investment in developed countries is the presence of mandates on vehicle CO2 emissions to tackle climate change and global warming. Even though most nations signed the Paris Accord, the developed nations are assumed to shoulder a higher responsibility when it comes to contributing to GHG reductions. And car companies know that, sooner rather than later, this will make a shift to electric almost inevitable. This could be one of the reasons we see even large vehicles such SUVs, vans and trucks getting electrified in the developed economies at this relatively early stage of the e-mobility sector.

In these countries, one interesting niche market where EVs are incorporated electric is defense and military – the reason for this is to reduce their dependence on oil when working in remote and risky locations.

Developing economies

Many developing economies (India, Kenya etc.) have a premium market that is much smaller in proportion to total market compared to wealthy economies. However, for countries such as India, their sheer population ensures that the premium market is large enough in absolute numbers even if they are small as a proportion of the total population.

Yet, most OEMs are used to catering to mass markets in these countries. Thus, while the Tesla market exists in these countries too, I doubt OEMs would invest significantly in innovating for these markets at an early stage.

But electric vehicles could solve a different kind of aspiration for many of these countries, especially countries such as India and China – the desire to breathe clean air. With air pollution rising to alarming levels in many cities in these countries, it is imperative that the governments did something about it. Electric vehicles are a powerful tool in this context.

To a certain extent, developing countries too have their targets for greenhouse gas reduction, and many of these countries already have standards to be met by auto OEMs in terms of the extent of pollution the cars can emit. For OEMs, a move to electric will make it easy for them to meet these targets and mandates.

In many developing economies, there’s also sizable interest from the business sector to use electric vehicles for their logistics (especially intra-city, short distance logistics), as it actually costs less on a total cost of ownership basis. With the emergence of electric vehicle as a service that does away with a high upfront cost, these segments are finding it easier to go electric.

While the start for electric vehicles in developed countries started with the premium markets, in some countries, the lowest ends of the markets are providing the initial thrust for electric vehicles. In India for instance, a very large percentage of electric vehicles sold are the low end electric rickshaws – essentially clunky and clattering, low-cost three wheelers on batteries and motors. For this segment, innovation has to revolve not around high-tech, but around low tech! In fact, in the case of India, the electric rickshaws are considered to be a prestigious promotion of sorts for many poor rickshaw pullers who earlier used to earlier pull tedious manual rickshaws.

Underdeveloped countries

In many poor countries in Africa, the main form electric vehicles are basically the low-end electric rickshaws.

For many of these countries, there are far more important life and death problems than climate change or even air pollution. Unemployment, health and education are dominant needs for both the population and the governments. Electric rickshaws (mainly in the form of electric three wheeler tuk-tuks), take care of some of these needs.

It is also possible that the batteries in the electric vehicles could also be something many in these countries with erratic power supply use as a backup energy storage – they can perhaps charge their mobile phones and even have their electric lanterns glow at night using the electricity stored in the rickshaws.

 


This is a part of the EV Innovation Intelligence series

Posts in the series

Tesla’s Valuation | EV’s in different countries | Purpose built EVs | Mainstream Fuel Cells | IT in Emobility | EVs versus ICEs | Advent of China in Emobility | Charging vs Swapping | Micromobility & EVs | Electric Aviation | Li-ion alternatives | Million Mile Battery | Battery Startups versus Giants | Sales & Financing Models | Ultrafast Charging a Norm | Heavy Electric Vehicles | Material Sciences in Emobility | Lithium Scarcity | Solar Power in EV Ecosystem | EV Manufacturing Paradigm | Innovations in Motors | EV Startups – a speciality Oil Companies’ Strategies | EV Adoption Paths | Covid-19 affect on the EV Industry |

 

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