Emerging Markets: Where the Infrastructure Gap Is Largest

The global EV transition narrative is substantially a story about China, Europe, and the United States. This makes some sense — these markets account for most of global automotive volume and most of the vehicles that will be sold over the next decade. But it leaves out roughly 4 billion people in markets where the EV transition is happening differently, slower, or facing fundamental barriers that the leading-market story doesn't capture.

India is the most significant case. With 1.4 billion people and rapid motorization growth — India is now the world's third-largest automotive market by volume — its EV trajectory has enormous implications. The good news: India's two-wheeler and three-wheeler markets have seen rapid EV adoption, driven by cost-effective Chinese and domestic battery packs and the economics of low fuel cost at small vehicle sizes. The bad news: passenger car EV penetration is around 2-3%, and the charging infrastructure outside major cities is minimal. India's electrical grid also has significant reliability issues in many regions, complicating overnight charging.

Southeast Asia is a mixed picture. Thailand has emerged as a regional EV hub, partly because BYD and other Chinese manufacturers have invested in local manufacturing to access ASEAN markets and tariff structures. Indonesia, with the world's largest nickel reserves (a key battery material), has pursued an EV strategy linked to its resource position. Vietnam and the Philippines are earlier stage.

Sub-Saharan Africa faces the most significant infrastructure barriers. Electricity access is expanding but still incomplete in many regions. Road quality affects EV battery performance and lifespan. Import tariffs on EVs in many African countries make Chinese EVs — which would otherwise be cost-competitive — expensive. The used car market, which provides vehicle access for most of Africa's population, is currently almost entirely ICE. Electric two-wheelers and three-wheelers are the EV form factor with the most traction in African urban markets, following the Southeast Asian pattern.

Latin America is fragmented. Brazil has strong bioethanol infrastructure from its sugar cane industry and has historically been skeptical of pure-electric in favor of flex-fuel vehicles. Mexico, as a major automotive manufacturing hub closely tied to US automakers through USMCA, is seeing EV production investment driven by US manufacturers relocating supply chains. Argentina and Colombia have limited EV markets.

The infrastructure gap in these markets is the key constraint. Grid electricity reliability, charging network density, trained service technicians, and import policies all matter before battery cost. Policy decisions made in these markets over the next five years — import tariffs, grid investment, charging infrastructure mandates — will determine whether the EV transition is a global one or primarily a wealthy-country phenomenon through 2030.

Emerging Markets: Where the Infrastructure Gap Is Largest

// COMMENTS

ON THIS PAGE