Hong Seng Extended Its Tentacles on the EV Sector

Hong Seng has acquired Alliance EV (AEV), the electric vehicle (EV) business arm of CSH Alliance, to complement the Group’s recent collaboration with EoCell Inc (USA) (EoCell) in manufacturing EV batteries.

To recap, Hong Seng had previously announced that it entered into a memorandum of understanding (MOU) with EoCell. The MOU outlined both parties’ intention to build and create a regional manufacturing hub in Malaysia to manufacture batteries for EV and progress to other power storage solutions for EV and to supply to EV manufacturers, assemblers, users in the Southeast Asian region (Project Volt).

EoCell is a major player in this sector due to its leading technology in energy storage solutions and has manufacturing tie ups in Europe and Americas for the local market there. EoCell was also a key contributor from the design to manufacturing of PHEV and EV batteries of prestigious and major European car brands. Hong Seng was selected by EoCell as its manufacturing partner for the Southeast Asian region.

Meanwhile, AEV is currently in a collaboration with BYD Malaysia (BYD), the Malaysian arm of BYD Company Limited (BYD Group) which is a global leader in four major industries (i.e. Electronics, Auto, New Energy and Rail Transit) to cooperate in the distribution of BYD T3 model (BYD T3), a fully commercial electric van as well as to set up a 4S (i.e., sales, service, spare parts and body, and paint services) service centre and a local assembly plant in Malaysia (Project EV).

To date, AEV has all the prerequisite business components ready to perform well in the EV sector. The company had successfully obtained the Manufacturing License for the assembly of Completely Knocked Down (CKD) commercial electric van and model approval for local assembly of electric commercial van, primarily the BYD T3 from the Ministry of International Trade and Industry (MITI) in January 2023.

Subsequently, AEV had also obtained the approved permits (“AP”) from MITI in February 2023 to bring in the Complete-Built-Up (CBU) units of BYD T3 into the country for distribution purposes prior to the set-up of the local assembly plant on the Tanjung Malim Land.

“With AEV’s ready resources, Hong Seng aims to develop a latest state of art EV manufacturing plant to capture the burgeoning EV adoption in Malaysia owing to increasing demand for eco-friendly transportation and government’s active promotion of the use of EVs by offering incentives and subsidies to both buyers and manufacturers. We are also looking to be a contract assembler for other EV brands and players to help them facilitate the set-up of CKD production lines in Malaysia at a later stage,” Lester Chin, Executive Director of Hong Seng said.

The Malaysia’s EV market is still in the infancy stage, and it is expected to grow at a CAGR of 27.6% during 2020-2025 according to a report by 6Wresearch. Meanwhile, other reports highlighted that the global EV market is expected to reach over USD 1,103.17 billion by 2030 while the global EV battery market size is expected to reach USD 225.55 Billion by 2030.

“Therefore, the EV battery manufacturing and EV manufacturing segments are very lucrative businesses for Hong Seng and we are adamant in tapping on paradigm shift from fossil-fuelled internal combustion engines (“ICE”) vehicles to EVs in Malaysia. Ultimately, the synergies from both Project Volt and Project EV will empower Hong Seng to emerge as an integrated player by securing both the upstream and downstream segments of the EV supply chain,” he added.

Pursuant to Project Volt, Hong Seng had also identified the Tanjung Malim Land which was held by AEV as a strategic location for the battery manufacturing plant. The land is located strategically adjacent to the Proton City which houses the biggest car manufacturing plant in Malaysia with comprehensive supply chain companies within the vicinity.

More importantly, the development of the DRB-Hicom Automotive Hi-Tech Valley (AHTV) in Tanjung Malim will transform Malaysia to be a hub for EV manufacturers and component suppliers, not just for the ASEAN region, but to a wider market and thus, Hong Seng will be able to tap into the available infrastructure, resources, expertise, and materials immediately for both the Project Volt and Project EV.

“Over and on top of all, Hong Seng aspires to play its part in promoting sustainable developments. As we know, electrification will play an important role in the transformation of the mobility industry and presents major opportunities in all vehicle segments, although the pace and extent of change will differ. Therefore, as industry players, we need to accelerate the speed of automotive technology innovation and develop new concepts of electric, connected, autonomous, and shared mobility,” he concluded.

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