The Philippines, Vietnam and Indonesia are competing to host another Southeast Asian electric-vehicle assembly plant for BYD Co, the world’s second-largest maker of EVs, according to a Philippine trade and investment official.
BYD last year sealed a deal to establish its first Southeast Asian plant in Thailand. The plant in Rayong is expected to start operation in 2024 and have an annual capacity of 150,000 vehicles, mostly for export to Southeast Asia and Europe.
The Chinese auto giant is in an “advanced stage of discussions” with the Philippines, Trade Undersecretary Ceferino Rodolfo said in an interview. BYD representatives scoured the Philippines for possible factory sites during a visit late last year and the company may decide on the site during the second quarter, said Rodolfo, who also heads the Board of Investments.
BYD, founded in 1995 under the name Build Your Dreams, has become a behemoth in China, the world’s largest auto market, by focusing on electric vehicles. Last year it sold 1.86 million battery-powered cars, including plug-in hybrids, which have both an electric motor and a petrol-powered engine. That topped Tesla’s sales total of 1.3 million cars in 2022, all of them battery-powered.
BYD is still exploring whether its second Asean factory will be a full-blown assembly plant or a final-assembly facility with parts shipped in from overseas, said Lanie Dormiendo, director for the Philippines’ International Investments Promotion Service.
A spokesperson for Shenzhen-based BYD said the company doesn’t have “any relevant information to disclose”.
Talks between BYD and Indonesia over a potential investment are ongoing, according to a person familiar with the matter who asked not to be named as the discussions are private. The Indonesian government is offering a slew of tax holidays, incentives and access to battery raw materials to convince the carmaker to set up there rather than expanding in a neighbouring country like Thailand, the person said.
Southeast Asian countries are racing to attract investments in EVs as global carmakers pivot away from the combustion engine, a transition that China has been dominating. Great Wall Motor Co has already set up a production line in Thailand, while nickel-rich Indonesia has drawn interest from both BYD and rival Tesla.
With an economy that expanded the most in nearly half a century last year, the Philippines is courting top-tier producers of EVs and batteries like BYD with tax breaks and other incentives under a law passed last year as rising oil prices help accelerate the global shift away from gas-fueled cars.
Indonesia and the Philippines, which together account for almost half the world’s nickel reserves, are a good fit for electric-car and makers of batteries where the metal is a key component. Rodolfo said BYD, which uses lithium iron phosphate in its EV batteries, is considering the Philippines for its growth potential.
“We’re not a low-cost destination, but we are a destination for companies who are looking for solutions for their net-zero carbon commitments,” he said.
The Philippines has previously lost out on investment opportunities to its neighbours given that its power rates are among the costliest in the region. But it is positioning itself as a hub for sustainable manufacturing facilities, Rodolfo said. The country aims to increase the share of renewable energy to half of its electricity mix from around 30% currently by 2040.
The Chinese battery making giant Contemporary Amperex Technology Co Ltd (CATL), is also in talks with Philippine government officials to invest in a plant to process nickel for electric car batteries, along with its subsidiary Brunp, said Rodolfo.
CATL did not immediately respond to a request for comment.
