At the moment, when we talk about the Electric Vehicles (EV) industry in Southeast Asia, Indonesia immediately comes to mind because of the country’s vision to be the EV hub of Southeast Asia by 2030. On top of this, EV makers around the world are in an intense race to secure raw materials that are found in Indonesia because these raw materials are essential for the production of EV batteries.
When we think of EV battery production, most start to think of Lithium, followed by Nickel and of the two it is Nickel which seems more likely to face a future period of short supply. Indonesia has vast resources of nickel. The country has about a quarter of the entire world’s supply. It is an increasingly important metal in batteries due to its properties that enable mass energy capabilities.
Interestingly, I’ve noted that there’s increasing interest by the European countries in Indonesia, and with it, a strong push towards helping Indonesia to transform into a circular economy.
Being a circular economy means that the country must focus on eliminating waste and put its lenses on reusing, sharing, repairing, refurbishing, remanufacturing and recycling. With these processes in place, they would be able to create a closed-loop system. This should essentially minimise the use of resource inputs and the creation of waste, pollution and carbon emissions.
However, environmental sustainability is another issue with questions routinely raised about the Nickel mining process and this has caused problems in Indonesia and the Philippines.
On one hand, China’s CATL and South Korea’s LG Chem are investing and tapping on the abundant reserves of nickel in Indonesia, which might raise sustainability and ESG concerns. On the other hand, Indonesia also aspires to be a circular economy with assistance from the UN and other European countries. Will the two initiatives clash and prevent Indonesia from becoming the EV hub of Southeast Asia?
Further up North, we have Thailand, which is already the region’s hub for automotive manufacturing and assembly. All along, the country has been aggressively promoting its automotive industry.
They’ve also done their part to become an EV hub and already attracted the likes of Mercedes and BMW. Mercedes-Benz has already begun local production of plug-in hybrid-batteries in Thailand with the opening of its new battery plant, which is located at the company’s vehicle manufacturing plant in Samut Prakan.
The battery systems manufactured in the new battery factory, are reportedly being built with very flexible and efficient production and facility concepts. The battery factory in Bangkok also uses large solar systems on the roofs of the production buildings. Excess solar power, for example, is temporarily store in so-called 2nd-life battery storage systems from recycled electric vehicle batteries.
The stationary storage systems can compensate for local energy fluctuations which contributes to grid stabilisation thereby, enabling resource-saving reuse for disused batteries of electric and hybrid vehicles.
All set up and ready-to-go with sustainability practices in place, Thailand can easily ramp up their production by preparing the Thais through reskilling and education programmes. The Environmental part of ESG, is already in place and they just have to make sure that both the Social and Governance aspects are being carefully taken care of and they are good-to-go.
With increasing focus on sustainability and ESG, will Indonesia face obstacles in their race to becoming the EV hub of Southeast Asia while Thailand coasts through?
What do you think?
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