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2022-01-22

Japan Could Miss Out on Southeast Asia’s Shift To EVs

INDONESIA AND THAILAND REPORT
Akihiro Komuro
Akihiro Komuro

Competition in the development of EVs is fierce, and the momentum for their introduction is growing in Southeast Asia. While Chinese and Korean manufacturers are aggressively entering the market, Japanese manufacturers, which hold an 80% share of the new car market, have not made any significant moves.

Although the COVID-19 disaster has brought the market to a standstill, Southeast Asia, with a population of 660 million and a rising middle class, will continue to be a promising growth market.

A proactive EV strategy is required to protect the current market dominance. In Indonesia and Thailand, the two largest markets in the region, Japanese cars have a 90% share of the market. However, it is only the Chinese and South Koreans who are providing the buzz about EVs.

In Indonesia, South Korea’s Hyundai Motor Co. will begin producing EVs in March at its completed vehicle plant that recently went into operation. For the time being, it will rely on imports for key components, but it is building a plant for mass production of onboard batteries in collaboration with LG Group, another Korean electronics giant.

In Thailand, China’s SAIC Motor Group and Great Wall Motor have already started selling EVs. The latter plans to start mass production of EVs in 2023 at a plant it acquired from GM in the US. Compared to China and South Korea, which are trying to secure a scale of production with an eye to exports, Japan is generally cautious, with Toyota and Mitsubishi considering local production of EVs in Thailand starting in 2023.

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LG Chem To Build Plant for Auto Battery Materials in Korea

FAR EAST: SOUTH KOREA REPORT

LG Chem says it will build a cathode material plant for automotive battery materials in Gumi, central South Korea. LG Chem has the second largest automotive battery business in the world. They will continue to invest in increasing production in the materials field to meet the increasing demand and plans to start mass production by 2025 and will build a dedicated line for cathode materials with high nickel content, called NCMA, which can increase the output of batteries.

LG Chem’s new plant will be its fourth; it has two cathode material plants in operation in Korea and one in China. The current production capacity is 80,000 tons. LG Chemical produces its own cathode materials, separation membranes, and adhesives, and supplies them to LG Energy Solution, its battery subsidiary. LG Chem is working with Toray Industries, Inc. to secure the amount of separation membrane to be procured.

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Look for Unprecedented Launch of EVs in Japanese Market

JAPAN REPORT

The Japanese market in 2022 will be greatly affected by two factors: COVID-19 in its third year and the semiconductor shortage. Despite this, companies are making steady progress in their approach to the industrial issues of the environment and safety, and in particular, the full-scale development of EV products is positioned as a major step toward the realization of carbon neutrality by 2050. The launch of EVs in the Japanese market in 2022 will be on an unprecedented scale.

Nissan will start selling its new model “ARIA” at the beginning of the year. Nissan and Mitsubishi are also jointly developing a mini-EV which they plan to launch early in 2022. Toyota and Subaru will also gradually roll out their first jointly developed SUV in Japan and overseas markets starting in mid-2022. Toyota’s “bZ4X” and Subaru’s “SOLTERRA” are the best-selling mid-size SUV EVs globally and will be the touchstone for future EV development. Honda will launch its first two Honda-brand EVs in China in the spring of 2022. These are also SUVs and will be marketed under the name “e:NS1” by Dongfeng Honda and “e:NP1” by Guangqi Honda, both of which are local joint ventures, and will be considered for export from China to global markets.

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2021-12-19

Indonesia Aims at Lead in Integrated EV Production

INDONESIA REPORT
Akihiro Komuro
Akihiro Komuro

Investment related to EVs is gaining momentum in Indonesia. While the government is aiming to upgrade the industry by mainly using nickel as a battery material, Hyundai Motor of South Korea and Hon Hai Precision Industry of Taiwan have announced their plans to produce EVs and automotive batteries. If the concentration of industries advances, the country will compete with Thailand, which is also making efforts to attract related industries, for the leading role in EV production in Southeast Asia.

At the Indonesia International Auto Show, which started in the suburbs of Jakarta on Dec 11, Hyundai Motor’s compact EV “Kona” attracted much attention. The company will begin production in 2022 at its plant in West Java province, which will soon be operational.

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Toyota Joins BYD To Build Affordable $30,000 Electric Car

JAPAN REPORT

Toyota reportedly has partnered with China’s BYD to develop an affordable electric car to launch next year. The Japanese automaker has widely been recognized as a laggard in the transition to electric vehicles. Years of betting on hydrogen fuel cells and hybrid vehicles has put Toyota behind on battery-electric vehicles.

Reuters reports Toyota is planning to release a “small and affordable electric sedan” in China next year:

The electric vehicle is reportedly going to be powered by BYD’s blade battery cells with LFP chemistry. LFP chemistry has improved enough in recent years that it is moving from mainly being used in electric buses to now electric cars. BYD’s blade battery has attracted a lot of attention – even from Tesla, according to reports coming out of China. A Toyota source talking to Reuters said that it is what is enabling the automaker to produce its first affordable all-electric car:

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2021-11-21

VinFast Launches Two EVs, Announces US HQ and Manufacturing Plant

Akihiro Komuro
Akihiro Komuro

VinFast has selected Los Angeles as its US headquarters and recently shared plans to begin manufacturing in the U.S. in 2024. VinFast is the automotive manufacturing subsidiary of VinGroup, a Vietnamese conglomerate that develops everything from real estate to technology and healthcare. The VinFast subsidiary was founded in 2017.

VinFast is working to deliver its flagship EV, the VF e34, later this year in Vietnam. When that happens, it will be the first-ever EV sold in the entire Vietnamese market.

Last month, we reported that VinFast was ambitiously entering markets overseas, beginning with the US, Canada, and Europe at the same time.

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Hyundai Motor Launches ‘Wage Half Price Plant’

For the first time in 23 years, a finished car plant has started operations in South Korea. The operator is Gwangju Global Motors (GGM). This unfamiliar company was established under the leadership of the city of Gwangju in southwestern South Korea, with Hyundai Motor taking a stake, to specialize in contract manufacturing of small cars. The city of Gwangju, which aims to attract industry and create jobs, and Hyundai Motor, which wanted a plant where production can be outsourced at a low cost, coincided in their intentions.

The site area of 455,000 square meters is lined with three buildings: a pressed car body factory, a painting factory, and an assembly factory. Inside the assembly plant, which measures 340 meters by 140 meters, eight colorful car bodies flow smoothly down a three-dimensional production line.

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NEDO Begins R&D of Hydrogen Aircraft

The New Energy and Industrial Technology Development Organization (NEDO) says it will launch a four-topic research and development project for the development of next-generation aircraft, including core technologies for hydrogen aircraft and drastic weight reduction of major structural components of aircraft.

By using Japan’s strengths in elemental technologies such as hydrogen and materials, the project aims to increase the ratio of participation in international joint development of airframes and engines (currently about 20-30%) and contribute to the decarbonization of the aviation sector. It will be implemented as part of the Green Innovation Fund project with a total of 2 trillion yen. The budget is 21.08 billion yen. Kawasaki will develop the core technology for hydrogen aircraft, while Mitsubishi Heavy Industries, Ltd. and ShinMaywa Industries, Ltd. will develop complex shapes and dramatically reduce the weight of major structural parts of aircraft.

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2021-10-24

Auto Production Down Sharply in Asia

SOUTHEAST ASIA REPORT: VIETNAM, THAILAND, MALAYSIA

Akihiro Komuro
Akihiro Komuro

At the end of September, an auto parts manufacturer operating a plant near the southern Vietnamese city of Ho Chi Minh is struggling with a sharp drop in orders. The parts produced at this plant are delivered to Toyota group companies.

On Sept. 10, Toyota revised downward its production plan for the same month and October, adding about 70,000 units to the originally planned production cut of about 360,000 units in September, and cutting production by about 330,000 units in October.

The company also announced that it would revise its full-year production plan from 9.3 million units to 9 million units. Parts suppliers in Vietnam were affected by this. It was around the same time that Toyota announced its production cutbacks that the manufacturer mentioned above was told by its business partner that it wanted to significantly reduce orders for October.

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Subsidy Program for Scrapping Diesel Vehicles Ineffective

FAR EAST: SOUTH KOREA REPORT

About half of those who received South Korean government aid to scrap their old diesel vehicles early have purchased diesel vehicles again, according to a new study. The government spent 845.4 billion won (about 79.6 billion yen) in the last five years (2016-2020) to scrap 959,000 aging diesel vehicles, but the number of all diesel vehicles increased by 9% during the same period. The government has pointed out that diesel vehicles are the main culprit of particulate matter such as PM2.5 and has implemented a policy to “eliminate” them, but this policy has not been effective.

There is subsidy support if old diesel cars are scrapped depending on the level of emissions in operation. In addition, there are additional subsidies if you buy an eco-car or a gasoline/LPG car.

If old diesel vehicles with a gross weight of less than 3.5 tons are scrapped early, they can receive up to 6 million won (about 570,000 yen) in subsidies. According to data from the Ministry of the Environment, 48,757 people in the Seoul metropolitan area purchased new cars in the first half of last year after receiving subsidies to scrap their old diesel vehicles. However, of the cars purchased by these people, 21,686 (44%) were diesel vehicles. Moreover, 15,990 of them were used diesel cars, 2.8 times more than the number of new cars (5,696).

Source: Chosun Online

PSR Analysis: It is hard to say that this is a flaw in the system, but the reality is that this system has not achieved its purpose and has produced the opposite effect. The reason for this situation is simple: many of the users of trucks under 3.5 tons are small businesses, and considering their expenses, they do not choose gasoline vehicles, and new vehicles are not an option, so they choose used diesel vehicles.

EVs and fuel cell vehicles, which are now being widely reported, are attracting attention as vehicles equipped with next-generation technologies. However, especially in the case of commercial vehicles, the high initial cost is frowned upon. The market should take another look at the fact that inexpensive vehicles that can easily demonstrate their contribution to business will be selected. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research