The electric vehicle (EV) market is growing at a healthy rate, driven by the need to reduce the global warming influences contributed by internal combustion engines (ICE). EV batteries have high nickel content. The Nickel Institute commissioned Avicenne Energy to conduct a multi-country study in Asia to understand the factors that influence the EV market.
EVs in Asia
In recent years, Asia Pacific has accounted for nearly 40% of the global light automotive market in terms of vehicles sold. China is the largest global market with over 25%, Japan with about 6% and S. Korea with 2%*. In Asia Pacific, the vehicles tend to be smaller and less expensive than in other major world markets, but the total numbers are substantial.
Asia Pacific is also becoming a significant driving force in the adoption of electric vehicles, mainly attributed to China where EV sales in 2020 were the largest in the world at 1.34 million vehicles. Japan and S. Korea on the other hand accounted for only 31,000 and 54,000 electric vehicle sales respectively.
About the study
Avicenne was contracted to look at the total cost of owning an electric vehicle in China, Japan and S. Korea and to try and understand whether there is a financial motivation to owning an EV.
The (total cost of ownership) TCO represents the complete financial cost during the time that a consumer owns the vehicle. The cars chosen for a best comparison between EVs and ICE in China, Japan and Korea were mid-size and in addition small size models in both Japan and Korea.
Even though there are significant differences between countries with respect to subsidies, taxes and incentives when purchasing an EV, the findings of the report indicate that the total financial cost of owning an EV in Asia Pacific could be a compelling advantage to the consumer for most vehicle models.
All EVs have significant advantages over ICE due to subsidies, electricity cost advantages, lower maintenance, and higher residual value, with the exception of low mileage ownership in Korea where the acquisition cost of the EV is very high.
In Japan and Korea, the acquisition cost of an EV is substantial and in some cases reaching over twice the price of an equivalent ICE due to limited availability. However, this gap will close when the domestic OEMs roll-out their vehicles in 2022-2023. In China there is very little difference in the acquisition cost of the two types of vehicles.
Subsidies in this region have a major impact in closing the gap between the purchase price of an EV and the ICE, up to 20% in some cases.
Electricity costs in China are very low. Korea’s are moderate and costs in Japan are similar to the highest found in Europe.
Public charging infrastructure in China is good with over 1 million locations, Japan has 40 thousand locations and Korea has 30 thousand. Public charging is also quite reasonable compared to either the EU or the US and is often a flat rate per month or only at a maximum of 1.4x the cost of home charging. Home base charging is common in parking garages but less so in private home locations.
In the Asia Pacific region, gasoline costs are lower than is typical in Europe but still higher than in the US. Fuelling EVs from home chargers and their maintenance costs are about 50% that of ICEs.
Gasoline vehicles have a low residual value in this region, and in China licence plates are only available by auction, costing upwards of 50,000 RMB in 2020.