The $50 Billion Electric Van Bonanza That Western Automakers Are Ignoring

Welcome back to The Electric!

We have two big live chats scheduled: At noon ET on Feb. 17, I’m delighted to welcome Dan Blondal, CEO of Nano One Materials, for a pop-up chat, “Reinventing the Battery Supply Chain,” on how the U.S. and Europe can leapfrog China and its lock on the refining of battery metals and manufacture of electrodes. Register here.

And at noon ET on Feb. 24, I’m excited to welcome Joe Lowry, CEO of Global Lithium and one of the world’s foremost experts on the metal, for “The Straight Dope on the New Oil—Lithium.” Among the aspects we’ll discuss is whether there will be enough lithium to enable all the electric vehicles announced by major automakers. Register here. 

Today we are looking at a substantial and widely overlooked market for EVs: E-commerce delivery vehicles in New Delhi, Nairobi, São Paolo, Jakarta and the cities of other lower-income countries. 

For decades, rich nations have shipped new and cast-off vans and trucks to Latin America, South Asia and other parts of the developing world, though the vehicles are often ill-suited for tropical weather, choppy roads and teeming cities. Now, in a largely overlooked development, electric vehicle developers based in these countries are challenging the status quo by building scooters and last-mile delivery vehicles that are more appropriate for their surroundings. In doing so, they are establishing the foundation of a potentially large new segment of the nascent EV industry.

Many of the companies—including Hero Electric Vehicles, EVage and Ola Electric—are based in India, which could become a staging ground for EV exports designed specifically for the comparatively harsh travel conditions of developing countries. That means the EV industry is splitting into two very different worlds: In the developed one, Tesla and other major automakers are introducing some 85 competing EV models by 2025, almost all of them designed for Western urban and suburban settings and priced from $40,000 to $100,000 and higher. But in the developing world, including Brazil, Indonesia and Nigeria, few people have that kind of cash. Even if they did, they are more likely to buy a scooter to navigate cities such as Bangalore and Jakarta, which are so congested that it can take an entire day to attend a single meeting across town and return home.

So what kind of spoils await those targeting the lower-income markets? Sales of electric two-wheel scooters and delivery vans in the developing world will reach about $35 billion by 2025 and $50 billion by 2030, according to data from Barclays and BloombergNEF, a renewable energy research firm. But this and other similar forecasts may underestimate the market: These are on the conservative end of a wildly different range of predictions, and the industry has tended to heavily underestimate future EV sales.