E-mobility in Emerging Markets

As the global push for decarbonization gains momentum, major automotive markets like Europe, the US, and China are at the forefront, propelled by ambitious electric vehicle (EV) policies and investments. In contrast, emerging markets face distinct challenges, including inadequate charging infrastructure and lower consumer purchasing power. However, recent developments suggest a potential turning point, fueled by the introduction of more affordable EV offerings, particularly from new entrants from China.

Our study takes an in-depth look at this evolving scenario. It analyses the state of EV adoption in key emerging markets and highlights untapped potential as well as possible threats for vehicle manufacturers. Drawing from extensive research, expert interviews, and our E-mobility Forecasting Model, the study provides critical insights and strategic guidance for OEMs.

State of the global EV transformation

The global EV market is undergoing a significant transformation. Legacy manufacturers, burdened by complex supply chains are contending with new entrants that bring agile, tech-driven approaches. Chinese companies, leading in BEV production, are challenging the dominance of established OEMs across the globe.

Key Market Insights: China, India, Brazil, and Thailand

China: A pivotal EV hub, China has seen its local OEMs rapidly increase market share, supported by strong government policies and aggressive price strategies. This success poses a substantial challenge to traditional foreign players, who must innovate or risk losing their foothold.

India: As the world’s third-largest passenger car market, India will gradually adopt alternative powertrains, influenced by government policies and subsidies. Market dynamics also favour CNG and hybrid vehicles as interim solutions, underscoring the need for a tailored approach for traditional OEMs.

Brazil: Known for its ethanol-powered fleet, Brazil presents a unique landscape where BEV adoption faces challenges from a dominant used car market. However, strategic early investments in local production and infrastructure by forward-thinking companies can provide a competitive edge.

Thailand: Positioned as the future EV hub of Southeast Asia, Thailand is benefiting from robust government support and active capacity expansion by OEMs. As infrastructure improves, BEV adoption is expected to rise significantly, making Thailand a critical market for automotive players.

Strategic Recommendations for OEMs

To navigate the challenges and capitalise on opportunities in these markets, OEMs can consider three strategic paths:

• Harvest (and possibly exit): Focus on maximising margins from existing ICE portfolios while scaling down investments in less profitable markets.
• Specialise: Leverage existing strengths to target specific market segments, such as premium or luxury segments, and focus on maintaining brand image.
• Invest and compete: Develop affordable EVs tailored to local market needs, leveraging existing assets and partnerships to stay competitive.

Emerging markets hold vast potential for EV transformation, but they come with unique challenges that require strategic foresight and adaptability from OEMs. As new entrants continue their global push, legacy players must act decisively to maintain their market share. Deloitte provides comprehensive support, from local market expertise to strategic investment and portfolio decisions, helping OEMs navigate this complex transformation landscape.

Download the full study here and explore how traditional OEMs can adapt their strategies to thrive in the evolving automotive world.