China is the biggest player in the Asian electric vehicle market – but the region still lags behind Europe, according to an analyst at research firm Fitch Solutions.
Asia is lagging because European governments are taking strong measures to stimulate growth in the sector, said Anna-Marie Baisden, head of automotive research at Fitch Solutions, in an interview on CNBC’s “Squawk Box Asia.”
“The region is catching up. When we talk about the Asian EV market, we’re mainly talking about China, which still accounts for about 90% of sales,” Baisden said.
“But there have been a lot of supportive policies rolled out in Europe, especially in the EU, over the past year in response to the corona virus … both on the infrastructure side and at the national level in terms of incentives,” she said.
According to Reuters, the U.S. company formed Tesla Motors India and Energy Private Limited in February with a registered office in Karnataka’s Bengaluru technology center.
While South Asia’s largest economy has enormous potential to drive the growth of the electric vehicle market, the country’s demographics may pose a serious challenge, according to Baisden.
“The supportive policies are there and manufacturers are starting to move in that direction with locally produced cars. But the demographics are different,” Baisden noted.
“The average income is much lower there than in the other Asian markets. There’s a lot of potential there, but it really comes down to the demographics in India,” she added.
Asia overtakes Europe in electric vehicle market, says Fitch analyst