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The Opportunities and Challenges of Electric Cars

  • 22 May, 2022
  • Harrison Kaye
The Opportunities and Challenges of Electric Cars
An Electric Car Being Charged

One of the biggest talking points surrounding green living is electric cars. Most car companies around the world are increasing the number of electric cars in their lineup, and people are slowly coming around to the idea of driving cars that rely on electricity, not gas, to get around. In Taiwan, electric cars offer a unique opportunity to the local electronics industry, but that doesn’t mean they’ve exploded in popularity among Taiwanese drivers just yet. 

Electric vehicles are causing quite the buzz, but just how environmentally friendly are they? Of course, they still have their own carbon impact as the electricity used to power them still has to be produced somehow. This comes from a mix of fossil fuels and renewables, and so until Taiwan and the rest of the world weans its energy supply off of fossil fuels, charging an electric car will still impact the climate. However, electric cars are still significantly better than traditional gas powered cars that directly burn fossil fuels in their engines. According to research from the International Council on Clean Transportation, electric cars are on average three times cleaner than diesel and gas powered cars in terms of carbon dioxide emissions. This will also only increase over time as the electricity used to supply national grids becomes cleaner too. 

The production of these cars offers a unique opportunity to Taiwan especially. Traditionally, Taiwan’s role in the car industry has been minimal. This is largely due to the fact that local companies couldn’t produce the crucial components that were needed for traditional car engines. However, as electric cars take off, the demand for Taiwanese produced semiconductors is increasing. Taiwan Semiconductor Manufacturing Company (TSMC) mainly produces semiconductors for other devices such as phones and computers, but car companies are beginning to need an increasing number of electronic components, all of which require semiconductors.

It’s not just semiconductor companies that are benefitting though. Other electronic manufacturers are also being called upon to provide different parts for electric vehicles. Companies such as Foxconn, Pegatron and Quanta Computer, all of which are Taiwan based, have been supplying parts to Tesla for example. By 2024, it’s estimated that Taiwan’s local manufacturing sector will be able to make 90% of all the parts used to produce electric vehicles in Taiwan.

Electric cars are therefore a great opportunity for Taiwan’s electronics industry, but that doesn’t mean that the cars are popular in Taiwan yet. The electric car market is still in its infancy and in 2020, electric cars made up just 1.8% of total car registrations in the US. This is still a great deal more than Taiwan however, where in 2016 only 737 electric vehicles were registered. This is on the rise and in 2020 there were over 13,000 new registrations. Despite this, electric cars currently make up less than 0.2% of all registered cars in Taiwan.

Part of the reason that electric cars still haven’t become mainstream in Taiwan yet is the lack of public charging infrastructure. Electric vehicles of course can’t be refuelled at a petrol station like traditional cars, and so if you’re making a journey you have to consider where you might have to stop and charge your car. Taiwan currently has just over 3,000 of these public chargers, which is a small fraction of the number that would be needed if more people were to purchase electric vehicles. 

There’s arguably no point building public chargers if there’s no demand for them. However people aren’t going to buy electric cars if they know they’re going to have issues finding a charger and so this kind of infrastructure will have to be built up first to encourage consumer confidence. This is an idea that has been recognised already, such as in 2021 when the Ministry of Economic Affairs started a project to speed up the building of public charging stations. 

Building enough charging stations isn’t the only issue plaguing the development of the electric car market in Taiwan however. Another issue to be considered is the instability of Taiwan’s power grid. People often complain about Taiwan lacking enough energy to power its grid, and in summer time when electricity demand is at its highest, it’s not too uncommon to see power outages. This is an even bigger issue that gets to the heart of Taiwan’s energy crisis, and one which there is still no definitive solution to.

The development of electric cars in Taiwan, both from a business standpoint and an individual standpoint will be interesting to watch. Electric vehicles are going to have to be relied on more and more in the future if Taiwan wants to phase out gas powered cars and the transition will provide lots of opportunities - but that doesn’t mean it’s going to be easy.

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