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Ebbing tide of demand: An electrified two-wheeler fleet could reshape Asia’s gasoline demand narrative
01 April 2021Nicholas YewYeng Ying Lee
Many carbon emissions targets come in the form of successive
announcements banning the sales and/or usage of internal combustion
engine vehicles (ICEs), more specifically, ICE passenger cars. In
Asia, similar announcements have also been made, with China and
OECD Asia leading the pack. However, the challenges that limit or
delay the widespread adoption of fully electric cars, though
improving, persist and are more pronounced in developing markets in
South and Southeast Asia. Such challenges though have not stopped
these markets from announcing some ambitious targets. While IHS
Markit believes that these goals will be difficult to achieve, it
highlights the intention of these markets to move toward a low
carbon environment.
Nevertheless, this does not mean that little can be done for
developing Asia. While the challenges in electrifying the passenger
car fleet may seem insurmountable for these markets in the short-
to medium-term, the same may not apply to their motorbike
fleet—how this differs for motorbike is scale, which translates
to a smaller gap that needs to be bridged between an ICE motorbike
and an electric variant.
Take price gap for instance, an electric car can cost US$ 30,000
or more against a comparable gasoline sedan of the same brand in
Southeast Asia, whereas an electric motorbike is around US$ 800
more expensive than its gasoline counterpart in Vietnam. Another
key difference between an electric car and an electric motorbike is
the adoption of battery swapping technology—subject to network
availability, the time needed for swapping spent batteries from an
electric motorbike is akin to refueling a gasoline motorbike.
In fact, China has seen great success in electrifying its
motorbike fleet—current estimates place the conversion rate to
electric models at over 50%. Although there are currently no
law-binding mandates in electrifying the motorbike fleet in this
region, the threat of an accelerated penetration remains should
there be a significant breakthrough in battery cost or increased
government support. Despite their better fuel efficiency against
passenger cars, motorbikes make up more than half the gasoline
demand in South and Southeast Asian markets. This means that the
electrification of Asia's motorbike fleet would have a significant
impact and potentially accelerate the decline in gasoline demand
growth.
That said, there are still technological gaps to be bridged for
an electric motorbike to equal a gasoline motorbike in terms of
on-road performance. In addition, as the energy mix in the region
remains high in carbon intensity, transport electrification in this
region will invariably be displacing carbon emissions from gasoline
consumption to power generation.
Posted 01 April 2021 by Nicholas Yew, Research Director, APAC Refining & Marketing, IHS Markit