Surfing the global electric vehicle wave
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Surfing the global electric vehicle wave

Interview: Thailand, Indonesia explore ways to expand their footprint in a growing global industry

An electric vehicle charges at Motor Expo held in Bangkok in November last year.  (Photo: Pattarapong Chatpattarasill)
An electric vehicle charges at Motor Expo held in Bangkok in November last year. (Photo: Pattarapong Chatpattarasill)

Arsjad Rasjid, chairman of Asean Business Advisory Council (Asean-BAC) and chairman of the Indonesian Chamber of Commerce and Industry (Kadin), has shared his opinions about the electric vehicle industry in which Thailand and Indonesia can work together to establish an efficient and resilient supply chain in Southeast Asia for the global EV industry.

How do you perceive Thailand's remarkable surge in electric vehicle (EV) registrations and the role of public-private partnerships and government policies in driving this growth, and what lessons can Indonesia draw from Thailand's success to enhance its own electric vehicle market?

Thailand has reported a surge in EV registrations, with over 32,000 EVs registered in the first five months of this year alone. This is equivalent to a 474.43% rise year-on-year.

In Indonesia, with a population of more than 270 million, we sold just 10,000 EVs in 2022 and predict that sales this year will reach only around 50,000 units.

I believe this is a result of public-private partnerships and supportive government policies, which comprise an 80% tax break that came into effect in November 2021 and will continue until Nov 10, 2025, and subsidies ranging from 70,000 baht to 150,000 baht (US$2,000 to US$4,350) for EVs that meet the required criteria from May 2022.

This enables automakers to narrow the price gap between EVs and traditional vehicles, making EVs more accessible and attractive to consumers. As a result, automakers such as BYD, GWM, SAIC, Hozon, and Tesla have entered the market, offering a more comprehensive range of choices for consumers.

From this, we can see a diverse market where the single most popular model, the top three models made up of BYD ATTO 3, Neta V, and Tesla Model Y, only have a market share of 37.5%, 16.9%, and 10.8% respectively.

The Thai model of EV adoption serves as an excellent example for other countries, including Indonesia.

By studying and adapting certain aspects of Thailand's approach, we can accelerate the growth of our own EV market.

Considering Thailand's strong position in the automotive market and its attractiveness to international automakers, particularly for electric vehicles, how do you envision the collaboration between Indonesia and Thailand in the production of EVs and automotive batteries, and what potential benefits can be derived from forming joint ventures and partnerships between Indonesian and Thai companies to strengthen the automotive supply chains in both countries and establish a robust EV industry in Southeast Asia?

We recognise the strategic opportunity and potential of collaboration with the Thai automotive industry. Thailand's strong position in the automotive market, coupled with Indonesia's abundant resources such as bauxite (world's sixth-largest reserves) and nickel (world's largest producer), presents a perfect opportunity for synergy and mutual benefits.

Thailand is the 11th largest automobile producer in the world and 2nd largest pickup truck producer. Thailand has emerged as the preferred production site for about 2,200 automotive parts and accessories manufacturers as well as international automakers including renowned brands like Mercedes-Benz, Toyota, and GWM, particularly for electric vehicles (EVs).

Arsjad Rasjid, Chairman of ASEAN Business Advisory Council (ASEAN-BAC) and Chairman of Indonesian Chamber of Commerce and Industry (KADIN)

Additionally, we are seeing significant investments in Thailand including from the state-owned oil company, PTT, which has committed 93.5 billion baht (US$2.6 billion) to prepare for EV production.

In this sense, Indonesia shares a common interest with Thailand in the production of electric vehicles and automotive batteries. Forming joint ventures and partnerships can significantly strengthen both our automotive supply chains. By integrating our resources, technology, and production capabilities, we can establish an efficient and resilient supply chain in Southeast Asia for the global EV industry.

With the integration of Indonesia's Quick Response Code Indonesian Standard (Qris) and Thailand's PromptPay QR opening up significant opportunities for micro, small, and medium enterprises (MSMEs) and tourism businesses, how do you envision this efficient and secure payment solution expanding its reach to a broader consumer base in both countries, and what measures can be taken to further promote the adoption of cashless transactions through the Qris system, fostering increased collaboration and economic activity between Indonesia and Thailand?

The integration of our Qris system with Thailand's PromptPay QR system opens significant opportunities for micro, small, and medium enterprises (MSMEs) and tourism businesses.

As of December 2022, there are 28.7 million Qris merchants and 90% are MSMEs.

Qris offers an efficient and secure payment solution, expanding its reach to a broader consumer base in Thailand and vice versa. Simultaneously, consumers in both countries will enjoy greater accessibility to a wide range of products. The integration of the Qris system with the PromptPay QR system in Thailand is a source of pride for us, as it aligns with our vision of fostering regional economic integration within Asean.

Establishing an Asean-wide QR Code payment system has been one of our legacy projects at Asean-BAC, and this achievement marks a significant step toward that goal.

Early data on Qris transactions between Indonesia and Thailand demonstrates the promising potential for increased collaboration and economic activity. By the end of 2022, Indonesian QR transactions in Thailand had reached an impressive 14,555 times, amounting to approximately Rp8.54 billion (19.76 million baht).

Conversely, Thai QR transactions in Indonesia totalled 492 times, with a value of around Rp114 million (260,000 baht). The difference in transaction volumes and values reflects the varying levels of awareness, adoption, and market penetration of the QR payment system, highlighting the potential for further cooperation to promote the use of cashless transactions.

Thailand just finished its election; what lessons can be learned from the post-election period in Thailand that can be applied to the upcoming election in Indonesia?

The recent post-election period in Thailand offers several lessons that can be applied to the upcoming election in Indonesia. Here are a few key takeaways. We can see a good collaboration between two parties that are actually competitors, namely the Move Forward Party and the Pheu Thai Party. In the end, they formed two important coalitions and won the election. Learning from this, competition and rivalry do exist, but it cannot be denied that behind the competition, there is still an opportunity to stand together and work toward a better future for the nation.

In this regard, Indonesia can also learn from Thailand. "Bertanding untuk Bersanding", or "compete to collaborate", becomes the key to the upcoming elections in Indonesia. Ultimately, all the competition is for the benefit of the nation's future, so we must all work together to build the country.

We can compete and challenge each other in the democratic process, but in the end, we must unite. We must remember that we have the same goal -- the welfare of the Indonesian people. That is what is important and what we must hold together. Instead of being in conflict, wouldn't it be better for us to join hands, stand together to preserve what we already have, and improve what is not yet perfect? Therefore, let's compete to collaborate.

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