Asia has firmly established itself as the epicentre of the global electric vehicle (EV) revolution, driven by a powerful combination of vast consumer markets, robust infrastructure and unparalleled control over essential raw materials. By contrast, Western giants such as Tesla and Europe’s legacy carmakers are grappling to keep up, facing falling market shares and mounting competitive pressure.

Asia’s dominance is underscored by projections from the Economist Intelligence Unit, which indicates the region will account for 63% of the 115mn EVs expected to be sold globally over the next five years. By 2028, EVs are forecast to make up nearly 40% of all new car sales in the region.

China remains the centrepiece of this growth. In 2022 alone, the country produced 3.3mn EVs – an increase of 400% since 2019. This output exceeded the total global EV sales recorded in 2020, allowing Chinese manufacturers to benefit from economies of scale that significantly lower production costs and improve competitiveness.

Infrastructure rollout

China now operates over 800,000 public EV charging stations, accounting for almost two-thirds of the global total. Among these are 760,000 fast chargers, and by the end of 2024, some 35,000 chargers are expected to be installed across highway service areas.

South Korea, despite a smaller EV fleet of around 299,000 vehicles, has backed its rollout with 170,000 public chargers – 35,000 of which are located in Seoul alone. Meanwhile, Southeast Asian countries such as Indonesia and Vietnam are rapidly expanding their charging infrastructure, with major urban centres like Jakarta and Ho Chi Minh City developing dedicated networks to meet rising demand. Meanwhile, Taiwan has long been known for its island-wide Gogoro network servicing electric scooters; a technology and business plan making waves elsewhere in Asia now.

This early and aggressive investment in charging infrastructure has transformed EVs from aspirational luxury items into viable daily transport across much of Asia.

China also controls over 60% of global lithium-ion electrode and cell production and leads the world in refining critical minerals such as lithium, cobalt, nickel and graphite.

Indonesia has also made significant strides, increasing its share of global refined nickel supply from 6% in 2009 to 61% by 2024. This was achieved by banning raw ore exports and directing the processing towards EV battery production.

Regional suppliers such as Zhejiang Huayou Cobalt operate extensive mining networks across Asia and Africa, further consolidating Asia’s control over the EV supply chain. At the same time, battery pack costs in the Asia-Pacific region have dropped below $140/kWh, with further declines anticipated – the costs are projected to reach $80/kWh by 2030.

These cost advantages are allowing Asian manufacturers to lead not only in scale but in affordability, setting a formidable benchmark for global competition.

Tesla on the wane

Once the undisputed leader in EV innovation, Tesla is now facing serious challenges in Asia and beyond. In China, sales have reportedly dropped by up to 49% as domestic competitors such as BYD, Xpeng and Leapmotor offer more competitively priced vehicles with greater technological sophistication. Tesla’s Full Self-Driving package, priced at around $9,000, has failed to impress Chinese consumers accustomed to rapid software innovation.

Elsewhere, Tesla’s global momentum has weakened. In the UK, Reuters reports, deliveries fell by 36% in May, while in Europe, the company saw a dramatic 49% slump in April deliveries – despite a growing regional EV market.

China’s automakers are now gaining traction in Europe. Models like BYD’s Dolphin are undercutting Tesla’s Model 3, forcing a reassessment of value in a market long dominated by Western brands.

Tesla's challenges include a maturing product line, rising competition, a higher cost structure, and reputational concerns surrounding CEO Elon Musk.

Europe losing ground

Europe’s automotive giants are similarly feeling the strain. Brands such as Volkswagen, Mercedes-Benz, Renault and Stellantis are watching their global market shares erode.

As of mid-2024, Stellantis held just 2.7% of the global EV market, Volkswagen 6.6%, and Mercedes a mere 1.9%. Meanwhile, the end of government subsidies, high labour costs, and a lack of access to low-cost battery components continue to suppress European competitiveness.

While software collaborations are underway, Europe still trails China in battery innovation and autonomous driving technology. Without lower-cost supply chains and greater investment in critical mineral access, European carmakers face the risk of long-term market decline.

Asia’s clear lead in the EV race is thus the result of aligning three key pillars: consumer demand, infrastructure and control over resources. As the region accounts for more than 60% of future EV sales, Western firms that fail to engage deeply with Asia’s ecosystem are increasingly seen as out of step with global trends.

To remain competitive, global manufacturers must:

1. Target Asia’s market growth – Ignoring the region’s scale is no longer viable.
2. Localise supply chains – Securing access to nickel, lithium, and battery manufacturing is crucial to price competitiveness.
3. Invest in infrastructure – Asia has already shown the feasibility and returns of network expansion.
4. Offer affordable, tech-rich vehicles – Chinese firms are winning mass-market appeal with feature-packed, reasonably priced models.

Asia’s game to lose

Asia has taken the lead in the global electric vehicle transition. The region’s vast demand, infrastructure investment and supply-chain dominance at present offer an unbeatable formula for success. Manufacturers such as BYD are setting the pace, while Tesla and Europe’s traditional carmakers contend with falling sales, outdated models and rising costs.

Unless global automakers pivot rapidly – investing in Asian markets, localising production, and embracing low-cost innovation – they risk being left behind as the world’s EV future is increasingly shaped in the East.