The electric vehicle (EV) market is a key area of competition for automakers and a strategic focus for governments worldwide. An expert noted that the market shows signs of regional division due to brand pressures and national policies.
Sharon Wu, the deputy director of the Industry, Science and Technology International Strategy Center at the Industrial Technology Research Institute (ITRI), said that in the US, policies like the Inflation Reduction Act (IRA) require sourcing battery minerals domestically or from reliable trade partners, potentially shifting supply chains away from low-cost countries like China. A "Made in America" strategy could foster a market divide, with European automakers expanding in the US and Chinese manufacturers targeting emerging markets.
In Europe, automotive production is moving to Eastern Europe due to the availability of cheap skilled labor and investment incentives. However, as EV subsidies phase out, demand is declining, requiring pricing adjustments, infrastructure investments, and tariffs on Chinese vehicles to remain competitive.
Japanese automakers are building supply chains in ASEAN and India, with companies like Toyota and Honda establishing production bases that boost local supplier engagement. Japan and Europe are also developing platforms to manage EV battery data independently from China, aiming to create their own battery supply chains.
China focuses on domestic production for its local market while using ASEAN facilities to target overseas markets. The government is pushing for increased procurement of local components by automotive manufacturers, with policies to enhance localization expected.
Globally, automakers are investing in EV development in regions like South Asia, Mexico, and Eastern Europe, although timelines may be affected by US policy changes and market dynamics. Automotive giants have established downstream assembly plants in these areas, with upstream suppliers likely to follow. Nonetheless, the influence of emerging policies and the EV industry's progress will shape the future strategies of major manufacturers.
Article translated by Jingyue Hsiao
