Paul Lock, Chairman & Managing Director of Pan Asia Metals (PAM), the only publicly traded battery metals company with advanced lithium projects in South-East Asia, believes that the urgency to transition to green mobility cannot be overstated. "And it's no longer solely about four-wheelers; two and three-wheelers are now part of the equation", he adds. "This goes beyond a matter of choice, but rather a responsibility that rests upon our shoulders as leaders to pave the way toward a future that is both sustainable and prosperous."
There are promising signs for SEA EV markets, with particularly impressive growth in Thailand and Indonesia. For Thailand, the share of electric cars in total sales came in at slightly over 3% in 2022, while and Indonesia averaged around 1.5% last year. Thailand is also strengthening policy support schemes, potentially providing valuable experience for other emerging market economies.
As of now, SEA countries implement different approaches to policies which support EVs adoption. For example, Vietnam's policies focus on reducing costs associated with EV ownership, with the exemption from registration fees for three years. In Indonesia, the government has introduced exemption from luxury sales tax and reduction or exemption from regional and central government taxes. Malaysia's policies focus on providing financial incentives to EV owners - the exemption from road tax for EV owners reduces the annual costs associated with vehicle ownership, making EVs more economically viable compared to traditional internal combustion engine vehicles. It is evident that Vietnam and Indonesia prioritise reducing upfront costs through tax exemptions and reduced registration fees, while Malaysia focuses on financial incentives and exemptions related to vehicle ownership and charging infrastructure. At the same time, Thailand's government has taken a different approach, developing policies which are primarily geared towards attracting global manufacturers and stimulating domestic production.
Thailand is already the largest car producer in the region, producing over 1.6 million motor vehicles in 2021. The government has set ambitious targets for EV production, aiming to reach 225,000 units or 10% of total car production in the country by 2023, and achieve a compound annual growth rate (CAGR) of 22% for EV production from 2022 to 2025. To support the long-term success of the EV industry, the government is providing subsidies for EV purchases, and customs duty exemption for imported parts used in EV production. Thailand is also focusing on infrastructure development. By 2030, the country aims to have 12,000 EV charging points across its regions.
But what is particularly important is that Thailand also provides incentives to attract EV investments through corporate tax exemptions, the duration of which depends on the type of electric vehicle. This encourages companies to invest in EV manufacturing and related activities by reducing their tax burden. Additionally, Thailand offers import tariff exemptions for production machinery, further reducing the costs associated with establishing manufacturing facilities. These incentives aim to position Thailand as a leading manufacturing hub for EVs in the ASEAN region, attracting global manufacturers and boosting domestic production. By lowering the taxes, Thailand aims to make imported EVs more price competitive with conventional vehicles.
Thailand's ambition to emerge as the electric vehicle (EV) hub of Southeast Asia faces formidable challenges on its path to success. Among the critical roadblocks hindering progress is the establishment of an extensive charging infrastructure, requiring significant investments and planning. Attracting major automakers and securing a stable supply chain for EV components is also essential for developing a thriving manufacturing base in the country. To accelerate EV adoption, the government must enact favourable policies, regulations, and incentives, enticing consumers to embrace cleaner transport options despite concerns about range anxiety and upfront costs. Additionally, the country must address grid capacity and prioritise renewable energy sources to meet the mounting electricity demands. Fierce competition from neighbouring countries in the region vying for the same status further intensifies the struggle.
Overcoming these challenges necessitates a comprehensive approach involving public-private partnerships, technological advancements, and environmentally conscious practices to cement Thailand's position as Southeast Asia's EV frontrunner. This includes developing a resilient EV supply chain which would include mineral resources mining for EV battery production, battery production, battery swapping, semiconductors for battery production, EV production, battery recycling, and EV research and development (R&D). Ensuring sustainability in the sourcing, usage and disposal of EV batteries presents a major challenge. While EVs have lower or zero tailpipe emissions, their manufacturing process is not carbon neutral. EV batteries, in particular, pose environmental and safety concerns. The responsible sourcing of minerals used in battery production and the development of sustainable mining practices are essential considerations.
Despite the formidable challenges, Thailand's commitment to becoming the electric vehicle hub of Southeast Asia remains resolute, bolstered by the nation's determination to pave the way for a sustainable and greener future. Looking ahead, promising signs indicate potential breakthroughs. Technological advancements in battery technology and charging infrastructure are expected to revolutionise the EV landscape, making electric vehicles more accessible and practical for consumers. Infrastructural developments are anticipated to accelerate rapidly, with the government's continuous efforts to expand charging networks and improve grid capacity. Moreover, forward-thinking policy changes and incentives will likely play a crucial role in fostering widespread EV adoption. As Thailand steers towards a cleaner and more energy-efficient transport ecosystem, its vision for a green and progressive nation on the forefront of the EV revolution appears well within reach. With stakeholders united in their pursuit, Thailand's future in the EV landscape looks brighter than ever before. But to fully realise the benefits of EVs, it is crucial to address sustainability concerns related to EV battery sourcing, usage, and disposal. By doing so, the country can cement its position as a regional leader in the EV market while contributing to a more sustainable transportation sector.
"With Asia's prominence as a global vehicle production hub and Thailand's status as the largest vehicle producer in South-East Asia, Thailand is uniquely positioned in the region to capitalise on the exponential demand for EVs and batteries and pave the way for our sustainable future," said Paul Lock. "We firmly believe that the future of transportation lies in sustainable, electric mobility. But to meet the needs in both battery chemicals and sustainable energy we need innovative, high-value products with a minimal carbon footprint. The lithium battery materials industry needs to focus on partnerships which would help shape an era where clean transportation is the norm rather than the exception."
Source: Midas PR
