Electric vehicles (EVs) have increasingly made their presence felt within ASEAN, in particular investment in EV production in Thailand and Indonesia. Currently, Thailand has an edge over Indonesia in terms of EV manufacturing, thanks to the government's clear policy of supporting the EV industry. Since such a policy has been implemented before Indonesia's for many years, Thailand will likely be able to manufacture battery electric vehicles (BEVs) ahead of Indonesia in the future. In addition, Thailand has a complete auto-parts supply chain, with local manufacturers supplying more than 80 percent of auto-parts used in automobile production in the country, and over 2,000 companies engaging in the auto-parts manufacturing business, which are relatively higher than those in Indonesia. These do not include Thailand's capability in assembling many types of automobile on par with the required international standards, while Indonesia has a specific expertise in manufacturing multi-purpose vehicles (MPVs). Moreover, Thailand is more ready and has greater opportunities to expand EV charging stations than Indonesia.
However, those advantages may disappear within five years because Indonesia will have new advantages over Thailand. These include Indonesia's capability in developing itself to become a production base of Li-ion batteries for BEVs because it is the world's largest source of nickel, which is an important raw material for battery production. In addition, it is expected that the number of consumers, who can afford BEVs in Indonesia, will be significantly greater than that of Thailand because of Indonesia's bright economic prospects. As a result, KResearch expects that BEV sales in Indonesia will likely begin to surpass those of Thailand in 2030.
For this reason, KResearch is of the view that Thailand must accelerate its efforts to adjust strategies in order to cement its strengths and prevent investment diversion away from Thailand to Indonesia over the next five years. Two important strategies that should be considered: 1) Building a newly important auto-parts supply chain for EVs, based on the existing auto-parts supply chain of internal combustion engine vehicles; 2) Building export opportunities for BEVs because the Thai BEV market is smaller than Indonesia's.