When a supply shock hits a product for which there’s no alternative — toilet paper during COVID-19, for instance — there’s not much people can do except deal with it. If a ready substitute is waiting in the wings, the outcome can be mass defection.

Think of how American drivers switched to smaller, fuel-efficient Japanese vehicles in the wake of the 1970s oil embargoes. Detroit’s big three produced almost half the world’s cars in 1973. They account for well under 10% today.

With a fresh Middle Eastern oil crisis building, Asian electric-vehicle manufacturers are poised to seize a new market. That will do to conventional gasoline cars and bikes what Toyota Motor, Honda Motor and their peers did to the U.S. auto industry in the 1980s. The same companies may be the losers this time around.

EVs have already hit solid double-digit market shares in multiple emerging markets, as falling battery costs and tax incentives helped undercut conventional cars. In recent months, battery-only models have reached around 50% in Thailand and Singapore, and about a third in China, Indonesia, South Korea and Vietnam. That’s streets ahead of the U.S. and Japan, where they’re well under 10%. All this was achieved without the helping hand of $100 oil.

Conditions are ripe for a broader shift. Hanoi........

© The Japan Times