Text: Huaxia Energy Network

On March 13, Thailand's Board of Investment (BOI) announced that it approved Sunwoda (SZ:300207) Sunwoda (SZ:) to invest more than 50 billion baht (about 10.8 billion yuan) to build a battery production facility in Thailand.

According to reports, Sunwoda will build two factories in Chonburi Province, which are planned to be officially put into operation this year. The Board of Investment of Thailand said Sunwoda is also considering a battery recycling business in Thailand.

The Secretary-General of Thailand's Board of Investment said that the local production of batteries will significantly strengthen Thailand's position as a manufacturing hub for electric and hybrid vehicles...... The project will also promote the widespread application of energy storage systems and solar technology in Thailand.

Huaxia Energy Network & Huaxia Energy Storage (public number hxcn3060) noted that from 2019 to 2023, Sunwoda's annual net profit was 751 million yuan, 802 million yuan, 916 million yuan, 1.068 billion yuan, and 1.076 billion yuan respectively, showing a gradual growth trend. In this way, the total amount of Sunwoda's investment in the construction of factories in Thailand almost exceeds its 10-year profits, which shows that it has made a "blood capital".

Sunwoda is a well-known lithium battery manufacturer in China, with products covering consumer electronics, power batteries, energy storage cells, etc. According to data from SNE Research, a South Korean battery research institution, the total shipment of Sunwoda power and energy storage batteries in 2024 will be 22GWh, ranking tenth in the world.

As early as 2018, Sunwoda designated its first overseas customer, Renault of France, and its power battery business customers include Volkswagen, Volvo, Nissan and other famous vehicle manufacturers. In the field of energy storage, its overseas market is also expanding. As of September 2024, Sunwoda Energy Storage has shipped a total of 16.67GWh, covering more than 100 countries and regions around the world.

In order to further go to sea, Sunwoda continues to increase the pace of overseas expansion. In July 2023, Sunwoda announced that it would invest in the construction of a battery factory in Hungary with its own and self-raised funds, with an investment of no more than 1.96 billion yuan, mainly engaged in the manufacture of lithium-ion batteries and power battery systems. This is the company's third overseas factory and its first overseas dynamic storage battery manufacturing plant.

Now, with the advancement of the lithium battery manufacturing project in Thailand, Sunwoda's overseas market will be further expanded. From the perspective of revenue proportion, overseas markets have become the pillar of Sunwoda's revenue. According to the data, from 2022 to the first half of 2024, Sunwoda's overseas revenue accounted for 43.30%, 42.74%, and 40.49% respectively.

It is worth mentioning that in the past two years, in addition to Sunwoda, many domestic leading lithium battery manufacturers have chosen to invest in factories in Southeast Asia, such as:

In July 2024, EVE Lithium Energy (SZ: 300014) announced that it plans to invest in the construction of energy storage battery and consumer battery manufacturing projects in Kedah, Malaysia, with an investment amount of no more than 460 million US dollars (about 3.277 billion yuan).

In the same month, Zhuhai Guanyu (SH:688772) announced that it plans to invest in the construction of a new energy project for Guanyu battery in Malaysia, with a total investment of no more than 2 billion yuan.

In October, CATL (SZ:300750) announced a partnership in Indonesia to invest US$1.18 billion to build a 15GWh plant in Indonesia's West Java province, which is expected to be officially put into commercial operation in 2027.

On January 9 this year, Ruipu Lanjun (HK: 00666) announced that it would invest in the construction of a battery factory in Indonesia to engage in the research and development, manufacturing and sales of lithium batteries, modules, modules and battery packs, and the first phase of the factory can produce 8GWh of power and energy storage batteries per year.

On March 11, Shuangdeng Group submitted a prospectus to the Hong Kong Stock Exchange, intending to raise funds for listing, mainly to build a lithium-ion battery production facility in Southeast Asia.

These cases show that China's lithium battery manufacturers are collectively optimistic about Southeast Asia, and like photovoltaics, new energy vehicles and other fields, the head enterprises will use Southeast Asia as a "bridgehead" to go to sea.

Huaxia Energy Network found that there are three main reasons why Chinese new energy companies love Southeast Asia:

First, Southeast Asia has huge market potential.

In terms of power batteries, many Southeast Asian countries have introduced supportive policies to promote the electrification of vehicles. For example, Thailand has introduced the "3030 Policy", which aims to eventually achieve 100% vehicle electrification by 2035. Malaysia plans to increase the share of electric vehicles in total vehicle sales to 15% by 2030.

In terms of energy storage, due to the fragile power infrastructure in Southeast Asia and the long-term power outages of residents, the people's demand for energy storage and backup power has existed for a long time, and the scale of the household storage market has been expanding. At the same time, countries such as the Philippines, Vietnam, and Indonesia are actively promoting large-scale energy storage projects to enhance grid stability and support the integration of renewable energy into the grid. Bloomberg New Energy Finance predicts that by 2030, the cumulative installed capacity of battery energy storage in Southeast Asia will reach 4.8CW/9.7GWh, an increase of more than five times from now.

Second, the low cost and government investment incentives in Southeast Asia.

Compared with domestic factories, Southeast Asia has obvious advantages in raw material costs and labor costs. At the same time, Thailand, Vietnam and other countries have also launched many preferential policies in order to attract investment. For example, in order to attract more battery manufacturers to invest and set up production bases in Thailand, Thailand exempts investors from corporate income tax, import duties on machinery and raw materials, etc., while providing certain financial support, and promising to improve the construction of relevant infrastructure and train high-level researchers in related fields.

Third, it is a channel to effectively resolve the tariff barriers of Europe and the United States.

In the field of new energy, the sanctions and suppression of Chinese companies by Europe and the United States have not stopped. Shortly after the start of 2025, the U.S. government announced that it would impose a 10% tariff on Chinese imports without discrimination. In the long run, the United States will raise the "tariff stick" at any time with the fluctuation of Sino-US relations, and Chinese companies need to plan ahead to avoid risks when going overseas.

In desperation, new energy companies will use Southeast Asia as a breakthrough channel, which is the most typical for photovoltaic companies a few years ago, and now battery and energy storage companies have also embarked on this road. From products going overseas, to production capacity going overseas, to global layout, Southeast Asia is an option for Chinese companies at hand.