Taiwan's EV registrations plunged 14.2% through May as tariffs and taxes dampen consumer appetite, with industry executives warning the market faces critical hurdles before achieving mainstream adoption.
EV registrations totaled 9,920 units in the first five months of 2025 in Taiwan, down from the same period last year, according to government data. May alone saw a steep 64.6% year-over-year decline to 1,496 units, highlighting weakening demand in the island's automotive sector.
The slowdown comes as BYD Electronics prepares to enter Taiwan's market, adding competitive pressure to an industry already grappling with structural challenges.
Pengxu Chen, chief executive of charging network operator U-Power, said Taiwan's EV sector stands at a "critical turning point" that will determine whether adoption moves beyond early enthusiasts to mainstream consumers. The market faces three key obstacles: pricing pressures, limited model variety, and insufficient charging infrastructure.
Taiwan's EV penetration surpassed 2.5% in 2020, entering what industry analysts call the "early adopters" phase. Progressing to broader market acceptance requires crossing the so-called "chasm" between tech-savvy early buyers and mainstream consumers.
Pricing remains a primary barrier outside the luxury segment. Foxtron's launch of the Luxgen N7 at around NT$1 million (US$33,450) in 2024 marked the first truly affordable option for Taiwanese buyers, Chen noted.
Product selection poses another challenge. Japanese automakers command 60-70% of Taiwan's car market but offer few electric models, limiting consumer choice.
Charging infrastructure development lags behind vehicle sales growth. Chen said his company focused on high-voltage charging stations from inception, operating 31 such facilities compared to Tesla's 17 high-voltage sites among its 100-plus Taiwan locations.
Recent product updates signal potential momentum shifts. Toyota's refreshed bZ4X increased driving range by approximately 25% despite only modest battery capacity gains, representing significant improvement for typically conservative Japanese brands.
The bZ4X's price dropped to NT$1.36 million (US$45,600) early this year from a pandemic peak of NT$1.67 million (US$55,900). Chen expects the updated model to price around NT$1.38 million (US$46,300).
Luxury segment competition intensifies as Mercedes-Benz prepares its MMA platform, Toyota readies next-generation BZ architecture, and BMW develops the Neue Klasse platform for upcoming launches.
Norway demonstrates EV adoption potential, achieving over 90% penetration after setting full electrification targets eight years ago for 2025 implementation.
Despite skepticism about market direction, Chen said U-Power's charging volumes and user growth indicate Taiwan's EV transition continues advancing, though policy support alongside market forces will determine the pace.
Article edited by Joseph Tsai
