Electric vehicles (EVs) are widely recognised as one of the fastest growing sectors in the coming decade, with global market value expected to top US$ 1 trillion by 2030.
EVs are also seen as an important solution to the effects of climate change, providing the industry with both commercial and environmental significance.
The EV industry has experienced strong growth in recent years, with sales increasing more than fourfold since 2018 and pushing EVs’ market share to approximately 10 per cent of global car sales. But despite such remarkable growth, the EV market share needs to reach 60 per cent by 2030 to achieve carbon neutrality. This requires a massive expansion in production and infrastructure, and the Taiwanese supply chain in this field is set to play a vital role in achieving critical mass for transport electrification.
Like many economies, the island pledged to achieve net-zero carbon emissions by 2050. The authorities are highly focused on the transport sector and have committed to moving all their vehicles and public buses over to electric power by 2030, with full electrification of the transport sector by 2035. To meet this goal, an estimated 15,000 internal combustion engine buses will need to be replaced with electric ones within the next decade.
A key supplier
The Taiwanese have a relatively complete EV supply chain, with more than 300 companies involved. It covers a wide range of products and services, from suppliers of hardware such as batteries, chassis and auto parts to software solutions such as automation and communication, sensors, power management and microcontrollers.
Infrastructure, including charging stations and traffic management systems, is also part of the island’s extensive EV ecosystem. Its competitive advantage is reflected in three core areas: batteries, motors and battery management systems.
In recent years the Taiwanese EV industry has rapidly expanded its production capacity to meet domestic and global demands. EV giants such as Tesla rely heavily on Taiwanese suppliers for most of their components.
Several Taiwanese car manufacturers are now launching their own EV brands and have forged partnerships with global car makers to jointly develop and produce vehicles, offering products ranging from two-wheeled scooters to 12-metre buses.
A substantial shift towards electrification is already taking place with scooters (mopeds) – a dominant mode of transport on the island and in many other countries in South East Asia – reaching 12 per cent of the current market share.
The trend is spearheaded by the Taiwanese e-scooter company Gogoro, which made its debut on Nasdaq last year. The company is known for developing its battery-swapping refuelling platform, a system distinct from conventional plug-in charging and which streamlines battery management and recycling.
Trial routes for e-buses are also being rolled out across Taiwanese cities, as well as in India, Indonesia and Japan. Apart from lowering carbon emissions, Taiwanese EVs also integrate advanced smart technologies, enabling safer driving and more precise traffic management.
The Taiwanese battery industry also plays a notable role in the global supply chain. The battery, often referred to as the heart of the EV, takes up roughly a third of the value of the vehicle. Although the island is not abundant in raw materials or renowned global battery brands, many Taiwanese companies excel in assembling battery modules and are major suppliers for upstream battery processing components such as anode and cathode materials.
Several Taiwanese companies are also pushing developments for next-generation technology such as solid-state batteries, notably ProLogium and Foxconn, one of the world’s largest electronics contract manufacturers and the main supplier of Apple iPhones.
Promoting the island’s EV industry
Recognising the growing opportunities in the EV industry and its significance in the global effort toward sustainability, the island’s trade promotion agency, the Taiwan External Trade Development Council (TAITRA), facilitates engagement between Taiwanese EV suppliers and global partners. TAITRA organises the annual 2035 E-Mobility expo, showcasing the Taiwanese EV industry and innovative technology. TAITRA also developed the Taiwan Smart Vehicle Supply Chain Map, depicting the entire industry through three components: EV assembly and key components; V2X and Autonomous ecosystem; and MaaS solution providers. The map is a great tool for potential stakeholders to find the right partners.
The business sector has also taken the initiative to bring strategic players together to accelerate industry development and facilitate innovation.
A prominent example is the MIH (Mobility in Harmony) consortium, founded by Foxconn. The consortium aims to create an open EV platform that encourages collaboration within the mobility industry.
The concept involves developing a module with standardised interfaces, allowing innovative designs to be introduced rapidly and with more cost efficiency. This approach, dubbed the “android system of the EV industry” enables different users – be they new EV brands, fleet operators or logistics service providers – to customise their designs and develop vehicles tailored to their respective business models. The consortium now consists of over 2,500 members spanning more than 60 countries.
Achieving net-zero is a consensus among the global community, and while regulations and initiatives are essential milestones, the practical implementation of infrastructure and technologies is equally important. The transport sector, being one of the largest contributors to carbon emissions, needs to shift towards greener, smarter and cleaner solutions to contribute to a sustainable future. The Taiwanese are poised to be a critical partner in this endeavour.
“The transport sector…needs to shift towards greener, smarter and cleaner solutions.”
“The Taiwanese have a relatively complete EV supply chain, with more than 300 companies involved.”
“The authorities… have committed to moving all their vehicles and public buses over to electric power by 2030.”