Thailand: EV battery recycling set to see sustained growth

Electric vehicle battery recycling could be a promising business, though the EV industry is facing challenges caused by the impact of the US trade policy and an economic slowdown, says management consultancy firm Arthur D Little (ADL).

This kind of recycling aligns with efforts to promote sustainability in the EV industry.

"We believe EV battery recycling will be a key business between 2030 and 2040, shifting away from today's focus on battery manufacturing," said Akshay Prasad, principal at ADL's Southeast Asia's automotive & manufacturing practices.

Lithium-ion batteries, which are widely used in EVs, are made up of important raw materials, notably lithium iron phosphate, also known as LFP, nickel, manganese and cobalt.

Putting them back into use again supports a circular economy of batteries and reduces the negative impact on the environment caused by fresh mining activities for these key materials.

The volume of LFP tends to increase as more EV batteries are used, but there is currently no business that recycles this material, said Mr Prasad.

Car buyers are interested in electric mobility technology, though Chinese automakers, key manufacturers of EVs in the global market, are struggling to deal with Washington's 100% tariff on their cars.

With the US trade barriers, global EV manufacturing is expected to decrease by 5-10% from 2030-2035, said Mr Prasad.

This has caused Chinese firms to target the Southeast Asian market and many of them are using various approaches to boost sales, including offering eye-catching EV discounts.

Many Chinese companies have expanded their EV businesses into Thailand, aiming to sell cars domestically and use the country as their new export base.

However, Thailand is encountering a sluggish economy, weak consumer purchasing power and a high level of household debt. These factors have dealt a blow to EV demand in the country, said Mr Prasad.

"But there are still good opportunities in the Thai EV industry. Many EV brands are well established in the country and many EV models have been welcomed by Thai buyers," said Mr Prasad.

ADL is aware of an EV price war in Thailand, but because this pricing tactic has been in place for many years, car manufacturers are likely to consider implementing new methods to increase sales.

Source: Bangkok Post