Recently, The Business Times (Singapore) reported that the auto industry has embarked on a fundamental transformation as countries around the world prepare for the goal of carbon neutrality. Notably at the COP26 summit in November 2021, many countries and leading automakers committed to phasing out fossil fuel-powered vehicles by 2040.
“Governments in the Southeast Asia region currently have very ambitious plans to capture some of the electric vehicle market share. This has created several opportunities for the industry in the region, as well as for other companies. domestic companies,” said the Singaporean newspaper.
In particular, Thailand is the country with the strongest motor vehicle production position in the ASEAN region. Notably, this country produced 2.5 million cars in 2013. By 2021, Thailand will have produced 1.7 million cars following the Covid-19 pandemic.
In order to reduce emissions that harm the environment and improve domestic production capacity, the country has adjusted the target of electric vehicles to represent 30% of total car production (about 750,000 out of 2.5 million units). ) by 2030, double the current 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 aim of conquering the American and European markets.
According to The Business Times, the shift to electric mobility will be essential to protect automakers in Southeast Asia and create opportunities. 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 automakers in Southeast Asia and create opportunities.
Southeast Asia becomes the world’s low-cost electric vehicle manufacturing 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 automakers to understand. business opportunities.
First, Mr Hirotaka Uchida analyzed, major global automakers have set ambitious carbon neutral targets for the company. Therefore, these companies are very interested in supporting Southeast Asian countries in the transition from combustion engines to electric engines.
The expert predicts that in the next 5 years, before domestic automakers can gain 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%. That is why access to affordable products with an attractive design is essential. This is the main strength of Chinese companies such as SAIC, Geely and GWM, as well as the way for new companies such as VinFast to enter the market,” said Hirotaka Uchida.
VinFast, founded in 2017 with an investment of USD 5 billion, started production of petrol cars in 2019, with BMW’s platform engines. In November 2021, the company introduced its first two EV models at the LA Auto Show. Accordingly, VinFast will offer its products to the US market at a competitive price along with an innovative battery rental model.
Second, it is a necessity to build a production center for electric car parts from scratch. In particular, thanks to its huge nickel ore reserves, Indonesia has made battery production a strategic goal to develop the national electric vehicle manufacturing sector. Accordingly, Indonesia banned metal exports in 2020 to protect its industry.
At the same time, the Indonesian government is providing incentives to reach the target of producing 400,000 electric cars and 1.76 million electric motorcycles, and to develop infrastructure for electric vehicles by 2025. Hyundai Motors is setting up a battery factory in West Java with LG energy solution. The company is not only investing in the production of electric vehicles, but also promises to help develop charging stations and recycle used batteries.
In Vietnam, VinFast is currently building a $174 million battery factory, initially planning to produce 100,000 battery blocks and approaching the target of reaching a capacity of 1 million blocks.
In addition, battery recycling could become a viable alternative for countries lacking rare metals, such as Singapore. Last year, Singapore opened its first dedicated battery recycling facility in Southeast Asia, with a recycling capacity of 14 tons of lithium-ion batteries per day.
Finally, domestic automakers can seize business opportunities by collaborating with foreign-invested companies. Typically, in September 2021, Thailand’s national oil and gas group PTT formed a joint venture to manufacture electric vehicles with Foxconn, the Apple assembler of Taiwan (China).
Accordingly, a new factory will be built in Thailand’s Eastern Economic Corridor. The plant is expected to produce 50,000 electric vehicles per year when it comes into operation around 2023 or 2024, with production set to increase to 150,000 units eventually. The Thai government hopes 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 companies to participate. In the long term, Southeast Asia will become the world’s production center for low-cost electric vehicles,” emphasized Hirotaka Uchida.
Source: The Business Times