ASEAN: Promoting use and production of EVs to achieve carbon neutrality
Thailand introducing incentive measures for EVs, Indonesia building battery plants with LG and CATL
Recently in the ASEAN market, every country has been advancing various measures for achieving carbon neutrality and, as a key measure for that goal, accelerating electrification of vehicles. Thailand and Indonesia aim to be regional EV (electric vehicle) production hubs as well as expand local production of EV batteries. Thailand has set a target for EVs to reach 30% of total domestic vehicle production by 2030, and introduced incentive measures to increase use and production of EVs. Indonesia intends to build an integrated production system of EV batteries using its abundant nickel ore. Malaysia has set a target for EVs to achieve 15% of total vehicle sales by 2030. The Philippines has introduced the EV Industry Development Act in 2022. In Vietnam, the electrification roadmap was announced and EVs will be exempted from registration fees for three years. Singapore plans to phase out internal combustion engine vehicles by 2040.
Vehicle production in four major ASEAN countries increased by 26.5% year-over-year (y/y) to 3.35 million units in 2021, and grew further by 14.7% y/y to 1.29 million units for the period January-April 2022. Production has been increasing owing to global economic recovery from the COVID-19 pandemic, but it is still below the pre-corona level due to lingering semiconductor supply shortages. Regarding the moves related to production, Great Wall Motors started production at its new plant in Thailand in June 2021. In Indonesia, Hyundai Motor began operations at its new plant in March 2022.
In 2021, six major ASEAN countries sold 2.73 million units, up by 13.2% y/y. Sales for the period January-April 2022 increased by 14.8% y/y to 1.11 million units. While new vehicle sales are recovering as the COVID-19 infections are decreasing, some countries are still suffering from semiconductor supply shortages and supply chain disruptions. Compared to sales for the period January-April 2019, a decrease of 3.2% was recorded, showing sales did not return to the pre-COVID 19 level. Regarding activities to promote vehicle sales, reduction in luxury-goods sales tax on new vehicles will be implemented in stages in Indonesia until September 2022. In Malaysia, the sales tax exemption period for vehicles produced in the country was extended to June 30, 2022. In Vietnam, vehicle registration fees were reduced by 50% until May 31, 2022.
|VinFast’s VF 8 midsize electric SUV (Production began in Vietnam in May 2022)
|Toyota brand’s first mass-produced EV bZ4X (to be launched in Thailand in 2022)
ASEAN Vehicle Sales and Production Update (Q1 2022) (May. 2022)
Bangkok International Motor Show 2022 (2): Keep Moving Forward Together (Apr. 2022)
Bangkok International Motor Show 2022 (1): Keep Moving Forward Together (Apr. 2022)
Japanese Auto Parts Suppliers in ASEAN: Responding to Mid-Term Demand Growth (Nov. 2021)
Thailand: Acceleration as EV hub, increasing battery production (Nov. 2021)
Indonesia: Battery production for 400k EVs in 2025; state and private enterprise collaboration (Oct. 2021)
ASEAN: Thailand and Indonesia building EV and battery production facilities (Jun. 2021)
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