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Beijing, August 3, 2026 – Asia Pacific automakers are staring down a seismic financial challenge as the global transition to electric vehicles (EVs) accelerates.
Analysts estimate that nearly US$95 billion worth of internal combustion engine (ICE) assets in the region could become stranded, threatening the viability of factories, supply chains, and equipment tied to gasoline-powered cars.
The warning comes as part of a broader analysis of the automotive industry’s fixed assets, which total US$354 billion globally across 15 major automakers.
Of that, Asia Pacific accounts for the largest share of ICE related exposure.
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Unless companies pivot quickly, these assets risk losing value within the next five years, creating a drag on balance sheets and investor confidence.
The EV revolution is no longer a distant prospect.
Global EV production is expected to surpass ICE output by the early 2030s, reshaping consumer demand and industrial priorities.
In Indonesia, for example, battery electric vehicle sales skyrocketed from just five units in 2020 to more than 103,000 in 2025, while ICE sales fell nearly 20 percent.
Similar trends are unfolding across Southeast Asia, where rising oil prices and energy volatility are accelerating the shift.
China and South Korea are leading the charge, with companies like BYD and VinFast aggressively expanding their EV portfolios.
Their rapid growth is displacing legacy ICE-focused brands such as Toyota, Honda, and Mazda, which now face mounting pressure to reconfigure their production strategies.
In Japan, the challenge is particularly acute: domestic giants risk plant closures if they fail to adapt to the new market order.
Automakers are scrambling to mitigate the looming risks.
Some are exploring repurposing ICE plants into EV assembly lines or battery production hubs.
Others are considering divestment of ICE-linked assets, though resale values remain uncertain in a shrinking market.
Supply chains are also being overhauled to accommodate EV specific needs, from battery materials to charging infrastructure.
Yet the transition is fraught with challenges.
Policy uncertainty across Asia Pacific complicates investment decisions, while consumer demand volatility driven by affordability and uneven charging infrastructure adds further risk.
Automakers with deep ICE portfolios face higher transition costs compared to EV first competitors, leaving them vulnerable to financial strain.
The Asia-Pacific automotive sector is entering a once in a generation restructuring.
The US$95 billion ICE asset risk underscores the urgency for legacy carmakers to pivot decisively toward EVs.
Those who adapt quickly may secure a foothold in the new market order, while laggards risk financial losses and eroded market share.
The coming decade will determine whether Asia Pacific’s automotive giants can reinvent themselves for an electrified future or whether they will be left behind, burdened by stranded assets and fading relevance in a rapidly evolving industry.
