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Which emerging markets are looking to expand the production of electric vehicles?

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As the demand for environmentally sustainable transport grows, a number of developing countries are stepping up their efforts to boost sales and production of electric vehicles (EVs).

  • – Several developing countries are moving towards the development of EV production facilities
  • – Thailand and Indonesia have offered a number of incentives for industrial development
  • – Car exporters, in particular, recognize the need to switch to EV

Thailand has established itself as a regional leader

One of the latest attempts to stimulate growth in the sector Thailand, which last month approved a stimulus package is designed to establish itself as a regional leader in this field.

As part of the plan to encourage the purchase of EVs, measures include a 40% reduction in import duties on fully built EVs worth up to BT2 million ($ 60,500) and a 20% reduction in electric vehicles costing BT2 million ($ 60,500) to BT7 million. $ 212,000).

In addition, the government has announced a reduction in the excise tax on imported electric vehicles from 8% to 2%, which is expected to add to the country’s fleet by 7,000 EV for the year.

Meanwhile, in an effort to expand EV production in the country, eligible carmakers will receive subsidies ranging from $ 70,000 ($ 2,120) to $ 150,000 ($ 4,540) for each car produced and $ 18,000 ($ 545) for each electric motorcycle. . .

Incentives support the country’s strategic plan, which aims to make 30% of all cars made in Thailand by 2030.

The latest measures stem from previous incentives aimed at accelerating the growth of the EV industry. In November 2020, the Thai Investment Council introduced a reduction in excise duties and corporate income tax holidays for those who invest in space.

As one of the leading industrial and automotive manufacturers in Southeast Asia, with an annual car production of around 2 million, Thailand is well positioned to benefit from the transition to electric mobility.

Indonesia enjoys natural benefits

Thailand is not alone in the region when it comes to increasing EV capacity, Indonesia has also introduced a number of measures in recent years.

In September 2020, the country published its roadmap for electric vehicles, which outlines plans to produce 600,000 four-wheelers and 2.45 million two-wheeled EVs by 2030.

This was accompanied by a number of tariff reductions and other benefits for those investing in the sector, while in March 2021 four state-owned enterprises set up the Indonesia Battery Corporation, which is tasked with managing the battery industry for EVs.

The events seem to have had the desired effect.

In December 2020, the South Korean multinational company LG and the Government of Indonesia signed a Memorandum of Understanding (MoU) on an investment deal of $ 9.8 billion in an EV battery. As part of a memorandum of understanding last September, LG and carmaker Hyundai began construction of a plant to produce batteries for EVs, which is expected to produce enough batteries for 150,000 EVs once completed.

In addition, Hyundai will be the first company to produce EV in Indonesia, and new models are expected at its plant in Cikarang later this year.

Although the EV market is still in its infancy, accounting for just 0.5% of Indonesia’s total car sales in the first half of last year, the country has one key advantage in its drive to expand production: nickel.

Indonesia has about a quarter of the world’s nickel reserves, a key component in battery production. Given that batteries account for about 35% of EV’s production costs, a constant supply of nickel can significantly reduce production costs in Indonesia and make the industry more competitive.

Emerging markets are responding to demand

Although the global EV market is dominated by China, Europe and the US, emerging markets – as seen in Thailand and Indonesia – are seeking to benefit from growing demand and cut their market share.

According to the International Energy Agency, the total number of electric vehicles, trucks, minibuses and buses is expected to increase from 11 million to 145 million by the end of the decade.

The need to move to electric mobility will be even more relevant for existing carmakers, and the benefits in many markets are rapidly shifting towards electric vehicles.

For example, last year the EU proposed measures that would essentially ban the sale of new petrol and diesel cars from 2035.

As a country that exports 64% of its manufactured cars abroad, including to EU markets in Germany, France and Belgium, South Africa is an emerging market that has identified the need to develop EV capacity.

Although production levels remain low and vehicles are taxed heavily, government support exists for the transition. Last October, President Cyril Ramaphosa said the transition to EV production would be “quick” and many industry representatives expected incentives to be implemented.

Elsewhere, Morocco, another key exporter of cars to Europe, has already made its first steps towards an EV-oriented future. Last year, German carmaker Opel began production of EVs in the country, with the Rocks-e becoming the first all-electric car made in North Africa.

– Thailand and Indonesia have offered a number of incentives for industrial development
– Car exporters, in particular, recognize the need to switch to EV

One of the latest attempts to stimulate growth in the sector is Thailand, which last month approved a package of incentives aimed at becoming a regional leader in the field.

As part of the plan to encourage the purchase of EVs, measures include a 40% reduction in import duties on fully built EVs worth up to BT2 million ($ 60,500) and a 20% reduction in electric vehicles costing BT2 million ($ 60,500) to BT7 million. $ 212,000).

In addition, the government has announced a reduction in the excise tax on imported electric vehicles from 8% to 2%, which is expected to add to the country’s fleet by 7,000 EV for the year.

Meanwhile, in an effort to expand EV production in the country, eligible carmakers will receive subsidies ranging from $ 70,000 ($ 2,120) to $ 150,000 ($ 4,540) for each car produced and $ 18,000 ($ 545) for each electric motorcycle. . .

Incentives support the country’s strategic plan, which aims to make 30% of all cars made in Thailand by 2030.

The latest measures stem from previous incentives aimed at accelerating the growth of the EV industry. In November 2020, the Thai Investment Council introduced a reduction in excise duties and corporate income tax holidays for those who invest in space.

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