Today, governments in Southeast Asia plan to capture a large share of the burgeoning electric vehicle industry.
Recently, The Business Times (Singapore) reported that the auto industry has begun a fundamental transformation as countries around the globe prepare for the goal of carbon neutrality. Specifically, at the COP26 summit in November 2021, many countries and leading car manufacturers pledged to phase out fossil fuel-powered vehicles gradually by 2040.
“Governments in the Southeast Asia region currently have very ambitious plans to grab a slice of the electric vehicle market share. This has created various opportunities for the region’s industry, as well as other businesses. domestic enterprises”, the Singapore newspaper commented.
Specifically, Thailand is the country with the strongest mark in the field of motor vehicle production in the ASEAN region. Specifically, this country produced 2.5 million cars in 2013. By 2021, Thailand has produced 1.7 million units after experiencing the Covid-19 pandemic.
In order to reduce emissions harmful to the environment and improve domestic production capacity, the country has adjusted the goal of electric vehicles to account for 30% of total car production (about 750,000 out of 2.5 million units). ) by 2030, double the present time.
As the world’s largest producer of nickel, a key ingredient in lithium batteries, Indonesia aims to become a hub for the production and export of electric vehicles. Meanwhile, Vietnam is developing VinFast with the goal of conquering the US and European markets.
According to The Business Times, the shift to electric mobility will be essential to protect and create opportunities for vehicle manufacturers in Southeast Asia. However, shoppers and most existing automakers don’t seem ready to adapt and exploit this potential.
The move to electric mobility will be essential to protect and create opportunities for vehicle manufacturers in Southeast Asia.
Southeast Asia will become the world’s low-cost electric vehicle production center
In that context, Mr. Hirotaka Uchida, Director of Automotive Applied Research at Arthur D Little Southeast Asia, pointed out a number of approaches for domestic auto manufacturers to grasp. business opportunities.
First, Mr. Hirotaka Uchida analyzed, major global car manufacturers, have set ambitious carbon neutral targets for the company. Therefore, these enterprises are very interested in supporting Southeast Asian countries in the transition from internal combustion engines to electric engines.
The expert predicts that, in the next 5 years, before domestic car manufacturers can have a foothold in the domestic market, large international companies will continue to dominate the manufacturing sector. cars in the area.
“Southeast Asia is seen as a huge, potential emerging market, where car ownership remains below 20%. Therefore, access to affordable products with attractive designs is essential. This is the main strength of Chinese companies like SAIC, Geely and GWM, and also the way for new businesses like VinFast to enter the market,” said Hirotaka Uchida.
Founded in 2017 with an investment of 5 billion USD, VinFast started producing gasoline-powered cars in 2019, with BMW’s platform engines. By November 2021, the company introduced its first two EV models at the LA Auto Show. Accordingly, VinFast will offer its products in the US market at a competitive price, along with an innovative battery rental model.
Second, it’s a necessity to build an electric vehicle parts manufacturing center from the ground up. Specifically, thanks to its huge nickel ore resources, Indonesia has made battery production a strategic goal to develop the nation’s electric vehicle manufacturing sector. Accordingly, Indonesia banned metal exports in 2020 to protect its industry.
At the same time, the Government of Indonesia is providing incentives to achieve the target of producing 400,000 electric cars and 1.76 million electric motorbikes, as well as developing infrastructure for electric vehicles by 2025. Hyundai Motors is setting up a battery factory in West Java with LG Energy Solution. The company not only invests in the production of electric vehicles, but also promises to help develop charging stations, as well as recycle used batteries.
In Vietnam, VinFast is currently building a battery factory worth USD 174 million, initially planning to produce 100,000 battery blocks and approaching the goal of reaching a capacity of 1 million blocks.
Besides, battery recycling can become a viable alternative for countries that do not have rare metal resources, such as Singapore. Last year, Singapore inaugurated its first dedicated battery recycling facility in Southeast Asia, with a recycling capacity of 14 tonnes of lithium-ion batteries per day.
Finally, domestic automobile manufacturers can seize business opportunities by cooperating with foreign-invested enterprises. Typically, in September 2021, Thailand’s national oil and gas group PTT established a joint venture to produce electric vehicles with Foxconn, the Apple assembler of Taiwan (China).
Accordingly, a new factory will be built in the Eastern Economic Corridor of Thailand. The plant is expected to produce 50,000 electric vehicles per year when it starts operations around 2023 or 2024, and output will eventually increase to 150,000 units. The Thai government hopes that these projects will make it easier for local suppliers to switch to producing electric vehicle components.
“Overall, Southeast Asia still has certain advantages as a global low-cost manufacturing hub. Business opportunities abound. Countries will continue to encourage more and more businesses to participate. In the long run, Southeast Asia will become the world’s production center for low-cost electric vehicles,” emphasized Hirotaka Uchida.
Source: The Business Times