English
contrastBtngrayscaleBtn oku-icon

|

plusBtn crossBtn minusBtn

|

This site
is mobile
responsive

sticky-logo

Malaysia well-positioned to increase battery pack assembly

Malaysia well-positioned to increase battery pack assembly

01 Apr 2021

The South-East Asian region offers the automotive industry a diversification strategy for Li-ion batteries intended for EVs

Malaysia and Thailand are well-positioned to increase the assembly of battery packs as both markets can take advantage of the export of completely built units (CBUs) of electric vehicles (EVs) in the region.

Fitch Solutions Inc, in a report yesterday, said the South-East Asian region offers the automotive industry a diversification strategy for lithium-ion (Li-ion) batteries intended for EVs going forward.

“The South-East Asian region has the potential to link into the accelerating global battery supply chain, with Indonesia set to participate heavily in the upstream sector, supplying the likes of Thailand and other significant players in the EV production landscape with much needed Li-ion battery cells.

“The assembly of battery packs could potentially take place in Malaysia and Thailand where the export of CBUs of EVs could take place,” it said.

The research firm said while Indonesia is anticipated to dominate the upstream and midstream sectors of the battery supply chain, Thailand and Malaysia can play a key role in the downstream sector.

“Battery cells manufactured in Indonesia could find a vibrant market in Thailand going forward. This is on the back of the country’s plan requiring 30% of total vehicles produced in the country to be EVs by 2030,” it said.

Fitch Solutions expects automakers such as BMW (Thailand) Co Ltd and Mercedes-Benz (Thailand) Ltd to enter supply contracts with Indonesia-based manufacturers for the supply, which would then be assembled into packs for EVs.

“Malaysia will be another source of battery cell demand going forward as the latest iteration of the National Automotive Policy (NAP), introduced in February 2021, will stimulate investments into EV production in the country.

“However, we expect EV production in the near term (one to three years) to be limited as Thailand emerges as a key hub for EV production in South-East Asia,” it said.

“Automakers in Malaysia such as Volvo Car Manufacturing Malaysia Sdn Bhd could offer some upside for the output of EVs to rise going forward, raising demand for Indonesian-made battery cells,” it said.

Fitch Solutions also noted that Perusahaan Otomobil Kedua Sdn Bhd, Malaysia’s largest automaker by sales volumes, has hinted at pivoting towards EV production in the country.

“While there is limited scope for Indonesian-made battery cells to receive sufficient demand in Malaysia and Thailand, we expect Indonesian battery production operations to offer export opportunities beyond the region,” it said.

Indonesia is poised to dominate the South-East Asian region’s battery supply chain as it has attracted investments into its battery manufacturing sector, as South Korea’s LG Chem Ltd and China’s Contemporary Amperex Technology Ltd have both unveiled large investments into battery manufacturing in the country.

“Indonesia’s large nickel deposits, coupled with a ban on the export of nickel ore, have prompted companies to invest into the country to secure critical nickel supplies for battery manufacturing,” the research firm said.

It expects nickel demand for EV battery manufacturing to rise at an annual average growth rate of 29.2% from 2021 to 2030, outpacing both lithium and cobalt demand.

“The upstream sector in the supply chain, such as resource extraction and mineral processing, will be a prominent part of Indonesia’s role, while the manufacturing of battery components will also take place in the country given the investments received so far.

Source: The Malaysian Reserve

TwitterLinkedInFacebookWhatsApp
wpChatIcon
X