Hong Seng, EoCell ink MoU for setting up mfg. hub for EV batteries, ESS in Malaysia
Hong Seng Consolidated Berhad ("Hong Seng" or "the Group") has announced that it has entered into a Memorandum of Understanding ("MoU") with EoCell Inc. ("EoCell") to develop a regional manufacturing hub in Malaysia, to manufacture batteries for Electric Vehicles (EV) and progress to energy storage solutions ("ESS") which will eventually be supplied to EV manufacturers, assemblers and users in the Southeast Asian region ("Project").
EoCell, based in Silicon Valley, California, is a research and technology company specializing in the design and development of high-energy nano-silicon anode materials and non-flammable electron technologies for advanced silicon and solid-state batteries. EoCell holds several patents in battery technology in the United States, is currently in a collaboration arrangement with Morrow Batteries AS in Norway, and is in discussions with several tier-1 OEM suppliers to the EV industry and other global battery manufacturers.
On the potential tie-up with EoCell, Hong Seng Group Managing Director Dato' Seri Teoh Hai Hin said: "EoCell is a next-generation battery technology company with a world-class team of battery experts. EoCell engineers have been key contributors to the design and manufacturing of PHEV and EV batteries for prestigious brands such as BMW, VW, Audi, Porsche, and Daimler. They are truly pioneers in the electrification movement, and we look forward to working with them to design and develop world-class EV batteries to be produced in our factory.
As the world enters the electrification revolution era, the Group has determined that the MoU is expected to provide a timely opportunity to venture into the EV battery and ESS sector. The global energy storage market has a very bright outlook, with a valuation of USD10.37 billion in 2020 and forecasted to reach USD37.06 billion by 2027. This translates into a CAGR of 19.9% between 2022 and 2027, and the batteries segment is expected to account for the largest share in the energy storage market."
Dato' Michael Loh, Chief Executive Officer of EoCell said: "We believe Hong Seng is poised to become one of Southeast Asia's leading battery producers with a focus on sustainable production facilities powered with clean green energy. We are excited to partner with them to develop their first-generation best-in-class battery for the EV market and look forward to collaborating on additional projects with them in the future. The Southeast Asian electrification movement is underway, and Hong Seng has a great strategy to fulfill this upcoming demand. We are excited to enter the Southeast Asian market and participate with Hong Seng's and Malaysia's clean energy initiatives."
According to the MoU, the parties have identified Malaysia as a suitable location to scale up the EV battery and ESS sector to serve the Southeast Asian region. The MoU contemplates that Hong Seng's main duties will include assisting to identify and propose suitable locations for the Project's site, proposing suitable consultants to undertake the necessary studies, and liaising with the Malaysian government to obtain incentives and necessary authorizations. Meanwhile, EoCell is expected to provide licenses of battery and manufacturing technology for EV batteries, relevant industry and technology knowledge about the implementation of the Project, and expertise in battery production line design and installation. The MoU is a non-binding statement of the parties' current intentions. Over the next 90 days, subject to the negotiation of a mutually acceptable definitive agreement, the parties intend to enter into a joint venture agreement and set up a new joint venture company.
"The Malaysian Government has earmarked clean energy and electric vehicle industries as one of the growth sectors for the country, and as the nation is striving for a greener world and decarbonization by replacing combustion engine vehicles with Electric Vehicles, the demand for batteries will experience exponential growth.
We are confident that the vision to develop Malaysia into the central of battery technology and manufacturing for Southeast Asia will materialize with the Malaysian government's strong support, the country's strategic location in the centre of Southeast Asia, and Malaysia's neutral political position which will be able to encourage bilateral trades among the countries involved," added Teoh.