When it comes to traditional auto technology, brands from big auto countries like Germany, Japan, the US and Korea always pop into our heads. However, this is the world of new auto technology. The global auto domain is bound to be reshuffled in the next 10 years, and even countries that we have never put on the auto map are now starting to show their competitive potential through the new technology platform of electric vehicles. The trifecta in Southeast Asian EV industry, Vietnam, Thailand, and Indonesia, is specifically noteworthy.
Let's look at Vietnam first. The government did not formulate any development strategy for the country's auto industry until 2014, but huge progress has been made ever since. VinFast, Vietnam's largest self-owned auto brand, was officially established in 2017. The company soon built a factory, put it into production, and embarked on the development of BEV models. It made a firm decision this year to stop selling fuel vehicles and transform into an EV brand. In March, it announced plans to build an EV factory in North Carolina, USA, which is expected to open in 2024 with an annual production capacity of 150,000 units. This startup, only five years old, is even preparing to go public with a US$2 billion IPO in the US at the end of the year. A mythical story is happening for real in Vietnam, a developing country we have never associated with technology. In fact, the impossible is turned into the possible in Vietnam only because the government and the industry are both determined to work together to create greater economic benefits through the new auto technology industry. There are even civil society organizations taking the initiative to suggest to the government that all auto manufacturers should only produce BEVs as of 2035. How can such an attitude not make the industries in Taiwan think twice?!
Now we move on to Thailand… The Thai government has purposely set up an EV policy committee with the goals of making 30% of the country's vehicle production BEVs by 2030 and 100% by 2035, as well as making the country the hub of EV manufacturing in Southeast Asia. The key components used in the production of EVs (e.g., batteries) are tariff-free, and tariff incentives are provided for imported EVs. There are also commodity tax incentives for EVs (the commodity tax for electric pickups is even reduced to zero). Thailand is absolutely unwavering in moving toward EVs. This February, Hon Hai and PTT Thailand established Horizon Plus to manufacture EVs. The factory is expected to be completed and begin production in 2024.
Finally, let's talk about Indonesia, the fourth most populous country in the world. Indonesia's innate advantages in mineral deposits have greased the path to EVs, making the development easier for Indonesia than for other countries. The nickel ore, which accounts for 30% of the world's production, and the copious cobalt, aluminum and copper ores in Indonesia are the raw materials needed to make EV batteries. Hyundai is the international giant that has the greatest ambition for Indonesia market. Without wasting any time, it completed the structural work of its first EV factory at the end of last year and signed a contract with the Indonesian government this March to expand the annual production capacity to 250,000 units. The first BEV to be locally produced is the Ioniq 5, which has just been launched in Taiwan. Moreover, Hyundai will increase its EV local content rate to 100% in 2024 with the help of the battery plant completed along with LG (with an annual production capacity of 10 GWh, which dwarfs the combined capacity of Taiwan's three major battery plants: Formosa Plastics, TCC and Hon Hai). In addition, Tesla will announce plans to set up a factory in Indonesia by the end of the year. BYD has started to cooperate with local manufacturers to produce pure electric buses, and Toyota has plans to produce EVs in Indonesia. All these point to a promising EV industry in Indonesia. The government has also announced that all official vehicles will be replaced with BEVs by 2030, demonstrating its determination to give full support to the EV industry.
So, what does the history of development in the Southeast Asian EV trifecta tell us? Sure, Indonesia has inherent advantages, but is there anything for the government and the auto industry in Taiwan to learn from Vietnam and Thailand? I'm not trying to "boost others' prestige while underestimating oneself," but Taiwan already has the chip technology, booming ICT industry, and solid traditional automotive supply chain needed for the development of intelligent EVs, so why not make up our minds to promote the EV industry at full throttle?!