Southeast Asia offers a prime green investment opportunity

• Urgency of electrifying mobility becomes ever more pressing when considering emissions data.
• Electric mobility revolution is not merely an environmental imperative but also a lucrative opportunity for private markets and impact investors aiming to redefine global transportation.

The mobility sector in emerging markets, particularly in South and Southeast Asia, presents a remarkable opportunity for green capital investment, with projections indicating that up to $1.3 trillion could be absorbed by 2030.

A recent report underscores India’s pivotal role in this revolution, highlighting its burgeoning electric vehicle (EV) market, which is increasingly favoured for its cost-effectiveness and environmental benefits.

In India, the shift towards electric scooters and three-wheelers is particularly noteworthy.

These vehicles not only provide significant savings in total ownership costs—an estimated  $40 to $112 per year less than their petrol counterparts—but also cater predominantly to low-income individuals, with 70 per cent of electric three-wheeler buyers being first-time purchasers.

It showcases the potential for inclusivity in the green transition, facilitating access to sustainable transportation options for diverse socioeconomic groups.

A proactive approach

The urgency of electrifying mobility becomes ever more pressing when considering emissions data; while mobility emissions constitute 10 per cent of total greenhouse gas emissions across Asia, they represent 25 per cent in Europe and 30 per cent in the United States.

As incomes rise in emerging markets, particularly in Asia, the risk of escalating emissions necessitates a proactive approach towards electrification.

Souleymane Ba of LeapFrog Investments aptly states that this electric mobility revolution is not merely an environmental imperative but also a lucrative opportunity for private markets and impact investors aiming to redefine global transportation.

Significant advancements in re-fueling infrastructure, particularly through the establishment of battery swapping stations and interoperable battery systems, have bolstered the appeal of EVs, especially for commercial users.

A unique opportunity

Presently, electric vehicles comprise about 20 per cent of last-mile transportation fleets in India, encompassing both passenger and cargo services. The growing adoption signals a shift in consumer preferences towards sustainable mobility solutions.

Furthermore, as noted by Dr. Steve Howard of Temasek, the combination of technological innovation, supportive policies, and substantial investments in Southeast Asia’s EV sector presents a unique opportunity for impactful transformation.

Industry leaders like Suman Mishra of Mahindra Last Mile Mobility are committed to promoting sustainability within the sector, ensuring that India not only leads in the electric three-wheeler market but also sets a precedent for full electrification.