Manufacturing & Gigafactories Developed 2023 · C8 4 min Recording available on request
Investment Case in Lithium-Ion Batteries in ASEAN: Indonesia, Thailand, Vietnam
Lithium-ion battery investment in ASEAN has become a live strategic question as Southeast Asia embraces electric mobility and localises battery production. This case study frames a global battery leader, Contemporary Amperex Technology Co. Limited (CATL), weighing where to enter the value chain across three markets: Indonesia, Thailand, and Vietnam. The goal is to identify the stage of the supply chain, from mining to recycling, where investment best supports long-term growth.
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The Problem: Three Markets, Three Different Gaps
CATL is the world's largest EV battery manufacturer, with 2022 revenue above 45 billion US dollars and lithium-ion production capacity beyond 390 GWh. It commanded roughly 33 percent of global installed EV battery capacity in 2021 and about 52 percent within China, supplying automakers including Tesla, Nio, Xpeng, Geely, SAIC, and Volkswagen. Global EV battery installed capacity is projected to grow at a 34 percent compound annual rate from 2022 to 2026, reaching about 1,387 GWh, with China representing more than half of demand.
Against that backdrop, ASEAN presents three distinct entry problems. Indonesia is Southeast Asia's largest lithium-ion component manufacturing base, rich in nickel and cobalt, and is pursuing a national programme to build local battery production and cut import dependence. Thailand offers a growing EV market and government incentives, but already hosts established local battery players. Vietnam is an EV market where motorcycles dominate and electric two- and three-wheelers are gaining ground, with an identified supply chain gap and a defined investment figure of 241 million US dollars in play.
The Approach: Matching Investment to Local Conditions
The analysis evaluates political dynamics, regulation, market-specific needs, and existing infrastructure in each country, then maps them onto the value chain: raw material mining, material production, cell manufacturing, pack assembly, and cell and pack recycling.
In Indonesia, the priority is deciding where along that chain to invest given the country's ambition to become a battery and component manufacturing hub. Local content rules under its battery localisation programme mean an entrant may need domestic facilities or partnerships, and abundant nickel and cobalt argue for close cooperation with local miners and refiners. In Thailand, the question is whether to build independently or partner with local players to draw on existing branding, relationships, and incentives, especially with a large planned expansion of charging stations by 2025. In Vietnam, the task is a targeted plan to fill the supply chain gap in pack and cell manufacturing while accounting for local competitors and a two-wheeler-led market.
Findings and Trade-Offs
The case does not treat ASEAN as a single opportunity. Each market rewards a different posture. Indonesia's mineral wealth and localisation drive point toward upstream and midstream integration and regulatory alignment. Thailand's mature incentive regime and incumbent players make partnership attractive relative to going it alone, because it shortens time to market and leverages established distribution. Vietnam's motorcycle-centric demand suggests product tailoring toward smaller-format cells and packs rather than importing a passenger-car template.
Common challenges cut across all three: political stability, local regulation, raw material access, supply chain integration, and the maturity of the industrial ecosystem. Environmental expectations are rising, which pushes any entrant toward responsible recycling capacity as part of the plan rather than an afterthought.
What It Means for the Industry
For battery manufacturers, the ASEAN case shows that a one-size strategy fails in a region where resource endowment, policy, and demand structure differ sharply between neighbours. Localisation rules increasingly force choices between wholly owned facilities and partnerships, and mineral-rich states such as Indonesia can extract commitments further up the value chain in exchange for market access.
The broader signal is that Southeast Asia is positioning itself as more than a consumption market. With nickel and cobalt resources, active incentive schemes, and rising EV adoption, the region is building toward integrated battery ecosystems. Investors who align entry point with each country's specific gap, and who plan for recycling and local content early, are better placed to capture that growth.
Key Takeaways
ASEAN requires country-specific strategies: Indonesia, Thailand, and Vietnam each present a different value chain gap.
Indonesia's nickel and cobalt wealth plus its localisation programme favour upstream and midstream integration with local partners.
Thailand's incumbent players and incentive regime make partnership more attractive than independent entry.
Vietnam's motorcycle-led market calls for tailored smaller-format cells and packs, with 241 million US dollars framed for closing its supply chain gap.
Local content rules can force a choice between wholly owned facilities and joint ventures.
Rising environmental expectations make responsible recycling capacity a core part of any investment plan.
Global EV battery capacity is projected to grow at 34 percent annually to about 1,387 GWh by 2026, underpinning regional demand.
Disclaimer: This case study was developed and presented by BatteryMBA participants as part of the Case Study Track. Views, analysis and recommendations are the authors' own. BatteryMBA does not take responsibility for the accuracy or completeness of the content and it should not be relied upon as investment, engineering or legal advice.
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