China’s BYD has three South-east Asian countries vying for plant

BEIJING – The Philippines, Vietnam and Indonesia are competing to host an electric vehicle (EV) assembly plant for BYD, the world’s second-largest maker of EVs, according to a top Philippine trade and investment official.

The Chinese auto giant is in an “advanced stage of discussions” with the Philippines, the South-east Asian nation’s Trade Undersecretary Ceferino Rodolfo said in an interview on Wednesday.

BYD representatives scoured the Philippines for possible factory sites during a visit late last year and the company may decide on a site during the second quarter, said Dr Rodolfo, who also heads the Philippine Board of Investments (BOI).

BYD, which is already set to build its first EV production facility in South-east Asia in Thailand, is still exploring whether the new factory will be a full-blown assembly plant or a final assembly facility with car parts shipped in from overseas, said Ms Lanie Dormiendo, director for the BOI’s International Investments Promotion Service. 

A spokesman for Shenzhen-based BYD said the company does not have “any relevant information to disclose”.

Talks between BYD and Indonesia over a potential investment in an EV factory in the country 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.

BYD did not immediately respond to a request for comment on Indonesia.

South-east Asian nations 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 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 petrol-fuelled cars. 

Indonesia and the Philippines, which together account for almost half the world’s nickel reserves, are a good fit for EV firms and makers of batteries where the metal is a key component. Dr Rodolfo said BYD, which uses lithium iron phosphate in its EV batteries, is considering the Philippines for its growth potential.

“We are not a low-cost destination, but we are a destination for companies that 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 as a hub for sustainable manufacturing facilities, Dr Rodolfo said. The country aims to increase the share of renewable energy to half of its electricity mix from around 30 per cent currently by 2040.

Chinese battery-making giant Contemporary Amperex Technology Company Limited, or CATL, is also in talks with Philippine government officials to invest in a plant to process nickel for EV batteries, along with its subsidiary Brunp, said Dr Rodolfo, 52, who has been with the government’s trade and investment agencies for a decade.

CATL did not immediately respond to a request for comment.

Dr Rodolfo was part of President Ferdinand Marcos Jr’s entourage in the United States and China, two of nine nations the Philippine leader has visited since he assumed office nearly eight months ago. Those trips generated about US$63 billion (S$84.6 billion) in investment commitments, according to his office. BLOOMBERG