Posted on 03 Apr 2023
Thailand’s automotive sector, the largest production hub for the ASEAN automotive sector, has been receiving strong government support for fast recovery after the pandemic, including tax incentive schemes for EV production, subsidy for EV purchases and additional tax incentives such as customs duty exemption for imported parts for EV production.
Overall, it is expected that car production will continue to grow at 5.5% y-o-y to 1.9 million units in 2023, following the economic recovery in the country and the expansion of car exports in 2022. In December 2022 alone, car exports rose by 10.2% y-o-y to 111,605 units. Thailand’s main export markets were the Middle East, other Asian countries, Australia and Africa. Shipments to Europe and the US dipped because of economic slowdown and the impact of the Russia-Ukraine conflict.
The government’s projection for EV production is expected to reach 225,000 units or 10% of total car production in the country in 2023. EV production is also expected to grow by a CAGR of 22% from 2022 to 2025. To ensure that the EV industry secures long-term success, the continued development of infrastructure to support the EV industry will be an important area. By 2030, Thailand aims to have 12,000 EV charging points available across its regions.
Indonesia’s government aims that by 2027, Indonesia will be one of the top three countries in the world producing EV batteries as well as electric cars. As Indonesia looks to transform itself into a global EV hub, it must strike a delicate balance between promoting domestic development and attracting foreign investment, while improving the affordability of EVs and aligning its green industrial policies with global trading rules.
By 2025, Indonesia is aiming to have 2.5 million total EVs on the road, including 400,000 fully electric cars and hoping for EVs to make up 20% of total car sales. It also plans to build charging stations in 2,400 locations, up from 267 EV charging stations in 195 locations as of March 2022.
The Indonesian government has already successfully invited many foreign carmakers and investors to the country. In 2022, Hyundai opened an EV plant outside Jakarta that will start using locally produced batteries in 2024. Top Chinese battery producer, Contemporary Amperex Technology (CATL) partnered Indonesia State-owned groups to construct a USD6 billion mining-to-batteries complex in the province of North Maluku. Mitsubishi likewise plans to invest USD 667 million between 2022 and 2025 and expand its local production facilities.
As for Indonesia, EVs remain unaffordable for much of the population and this becomes an obstacle for the government to boost up domestic market in recent years.
The Malaysian Automotive Association (MAA) has projected sales of EVs to be much higher in 2023 compared to the 2,631 units sold in 2022. The association proposed incentives for the government to consider in the formulation of the revised budget 2023 which includes start-up cost incentives for any local/city councils interested in setting up public charging stations for up to 20 vehicles in a city, with funding allocation capped at RM500k for each rest area catering for six DC chargers on highways and a grant for non-landed property managers for the installation of an EV charger, capped at RM 10,000 each.
Zero Emission Vehicle Association (ZEVA) also proposed a matching grant for R&D on EVs, specially catered for the automotive industry, as well as a case rebate for trade-ins of petrol/diesel vehicles for EVs and cash incentives for the purchase of a new EV on top of the tax exemptions already in place. The association has also proposed that the government extend the existing incentives to 2023 to give time for the industry to respond. If all these fall in place, it is expected that there will be a total of 700,000 units of EV sales by 2030.
Minister of International Trade and industry claimed that the country’s strength is that many local residents are skillful and the government will focus on Technical and Vocational Education and Training (TVET) to enable more people in the country to increase their respective skills.
Philippines’ automotive sector covers a small number of the assembly and rebuilding of jeepneys and other small vehicles. Most of the domestic car demand is from importation. Recently, the Board of Investments confirmed that representatives of a Chinese automotive company were in the Philippines in late 2022 to apprise the government of their plans for an EV assembly project.
Myanmar’s government announced the full support on the usage and development of EVs industry within the country in November 2022. Finance Ministry took the first action with a reduction of import tax of BEVs to 0%, effective from 2 November 2022 to 31 March 2023. However, Myanmar is still facing limitation on unstable electric supply within the country, apart from the on-going political issue.
Cambodia’s automotive sector is still small, but experienced rapid growth in recent years. The government’s development roadmap is to turn Cambodia into a regional and global production hub for automotive and electronic components. The plan includes welcoming more investment and boosting exports in the long run.
On average, Cambodia received four new automotive sector investment projects each year from 2016 to 2019 and for that there were additional 500 workers each year, with the current total at around 10,000. Top buyers of the Cambodian automotive sector’s product include Thailand and Japan.
Source:SEAISI
