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Around USD 95 billion worth of internal combustion engine (ICE)-related manufacturing assets in the Asia-Pacific region could face obsolescence as electric vehicle (EV) production overtakes ICE vehicle manufacturing within the next five years, according to a new report by CBRE. The report estimates that major automotive groups with a strong regional presence hold approximately USD 354 billion in ICE-linked fixed assets globally, with around one-quarter located in Asia-Pacific. CBRE expects the transition to accelerate investment in Southeast Asia as an EV manufacturing hub while encouraging automakers to adopt asset-light strategies, including sale-and-leaseback transactions and greater collaboration with logistics providers and institutional real estate investors to modernise industrial infrastructure.
Automotive manufacturers across the Asia-Pacific region could face growing pressure to repurpose or monetise legacy manufacturing facilities as the transition from internal combustion engine (ICE) vehicles to electric vehicles (EVs) accelerates, according to a report released by CBRE.
The report, Making It & Moving It, estimates that 15 major listed automotive groups with significant operations across Asia-Pacific collectively hold around USD 354 billion in fixed assets linked to ICE vehicle production, including manufacturing plants, machinery and equipment. Approximately one-quarter of these assets, valued at around USD 95 billion, are located in the Asia-Pacific region.
CBRE said the asset base could become increasingly vulnerable as global EV production is projected to exceed ICE vehicle manufacturing within the next five years. The consultancy noted that manufacturers would need to repurpose, redevelop or divest legacy facilities to prevent these assets from becoming stranded as production shifts towards electric mobility.
Ada Choi, Head of Research, Asia-Pacific at CBRE, said asset-intensive automotive manufacturers operating with relatively narrow profit margins should consider recycling capital through strategies such as sale-and-leaseback transactions and asset disposals. She noted that these approaches could help release capital tied up in legacy manufacturing facilities while supporting investment in next-generation production capacity.
The report also highlighted Southeast Asia's growing role in the global EV supply chain. According to CBRE, automotive manufacturers are increasingly relocating production to countries including Thailand, Vietnam, Indonesia, Singapore and Malaysia as they seek to reduce tariff exposure, benefit from government incentives and strengthen regional supply chains through localised manufacturing.
Sidharth Dhawan, Head of Alternatives Leasing, Asia-Pacific at CBRE, said the transition to electric mobility was encouraging manufacturers to expand production capacity across Southeast Asia while building more resilient regional supply chain networks. The report noted that this shift is contributing to rising demand for industrial and logistics real estate in key manufacturing locations across the region.
CBRE also observed that modern EV manufacturing requires substantial investment in power infrastructure, automation technologies and environmental, social and governance (ESG) upgrades. To finance these investments without placing additional pressure on balance sheets, manufacturers are increasingly adopting asset-light operating models.
Under this approach, companies are relying more heavily on third-party logistics (3PL) providers, institutional real estate investors and sale-and-leaseback structures to fund industrial facilities while retaining operational flexibility.
Michael Bowens, Managing Director and Head of Industrial & Logistics Leasing, Asia-Pacific at CBRE, said real estate had become an important tool for manufacturers seeking to unlock capital tied up in legacy industrial assets and redirect it towards investments required for EV production. According to the report, this growing emphasis on capital recycling is expected to reshape industrial real estate investment across the Asia-Pacific automotive sector as manufacturers adapt their property portfolios to support the next phase of vehicle production.
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