The West’s being left in the dust by the rest’s rapid adoption of EVs

China, where plug-in vehicles have nearly half the market, gets most of the world’s attention, but neighbouring Vietnam isn’t far behind: Pure-play EV-maker VinFast Auto accounted for more than a third of car sales in the first half of this year. Turkey’s 13% sales share for pure-EVs in the first quarter was about double the penetration rate in Spain and Australia, according to a survey by Strategy&. In Indonesia, the share was about the same as in the US, at 7.4%. In Malaysia, it was 8.6% in the first half of the year.

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Those countries all have legacy car industries still pumping out internal combustion engines. Things are moving even faster in nations wholly dependent on imports. More than three-quarters of the value of vehicles brought into Nepal, Sri Lanka and Djibouti last year was purely electric. Import shares in Ethiopia and Laos were 40% and 30% respectively. In 2024, plug-in sales increased by 60% in developing countries as a whole, according to the International Energy Agency.

As with the wave of EVs taking over the Gulf’s oil producers, it’s a sign of a world switching to electric mobility with breathtaking speed. The pace of change makes Opec, an oil cartel that expects oil consumption in developing economies to increase by half by 2050, look deluded.

It’s not impossible that this rapid electrification will slow down. EV buyers in emerging markets over the past few years have been encouraged by a range of exemptions from import tariffs, licences and sales taxes. These subsidies may be removed as local markets mature.

That’s a thin reed on which to base hopes of a petrol resurgence, though. In major emerging markets, EVs were already around price parity with conventional ones last year (in Thailand, they were cheaper). Falling battery costs and rising volumes have since driven down the price of market-leading Chinese EVs by another 10%, while a weaker US dollar has improved purchasing power in many countries.

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Combined with the lower ownership costs of EVs—a major consideration in emerging markets, where a larger share of vehicles are used as taxis and to transport goods, rather than as private cars—that’s likely to keep battery automobiles competitive with conventional ones, even without government support.

Policymakers are also likely to extend such incentives for purely macroeconomic reasons. In India and Pakistan, oil and gas account for as much as a third of their total import bill, compared to around 10% in the US and EU. That makes the economy unusually vulnerable to swings in the price of crude and ensures that money spent on transport fuel is enriching other countries, rather than being recycled through domestic supply chains where it can enhance economic growth.

Switching half of India’s car fleet to electricity—still a far-off ambition, to be sure—would be sufficient to eliminate the country’s persistent current account deficit, according to one 2022 study.

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Conventional cars will still be guzzling gas for years after they disappear from dealers’ lots. BloombergNEF doesn’t expect the fleet of plug-free cars to peak until 2028. That will provide an ongoing market for petrol and diesel—but it’s still a declining one. By 2030, BloombergNEF forecasts that EVs will be displacing about 5.3 million barrels of oil per day, equivalent to about a tenth of all road fuel consumed globally at present.

The stronger argument for the resilience of road fuel at this point isn’t that emerging markets are going to start using more of it. It’s clear this battle is already being lost. Instead, it’s that rich countries have raised tariff barriers, bungled charger rollouts and loosened fuel-economy rules to the point where they’ve sabotaged their own transition plans.

That’s giving incumbent carmakers a chance to eke a few more years out of their obsolete businesses, while competitors in the Global South seize the technological lead. Most of the world is already taking advantage of cleaner and cheaper road transport. By the time developed countries realize how far they’ve fallen behind, it will be too late to catch up. ©Bloomberg

The author is a Bloomberg Opinion columnist covering climate change and energy.