Singapore Emerges as Key Investment Base for Chinese Battery Industry in Southeast Asia

Singapore, a small city-state with an area of only 735 square kilometers and a population of 6 million, is rapidly becoming a frontline base for Chinese battery industry companies to invest and trade in Southeast Asia. Notably, several battery-related orders have begun to be issued or received from this petite nation. In January, a subsidiary of Xingyuan Material in Singapore, Innovie, secured a large order for battery separators from Yiwei Lithium Energy, with the two parties signing a global strategic cooperation framework agreement. According to this agreement, Yiwei Lithium Energy will purchase no less than 2 billion square meters of battery separators from Innovie from 2025 to 2030. In July, CATL signed a battery supply order with Singapore’s renewable energy developer Vanda RE. Vanda RE will procure a total of 2.2 GWh of battery energy storage systems from CATL for its integrated solar-storage project in Indonesia's Riau Islands. Vanda RE is a joint venture between Singapore's Gurīn Energy and Malaysia's national oil company Gentari. This battery energy storage project is set to be part of an integrated solar power plant that will have a capacity of 2 GW and a 4.4 GWh storage system, making it one of the largest solar-storage integrated projects in Southeast Asia upon completion. The project will also export electricity to Singapore via the Indonesia-Singapore 'Green Economic Corridor', expected to deliver about 300 MWh annually, with an anticipated completion in 2027. As of now, many Chinese battery industry companies, including Yiwei Lithium Energy, Tianci Materials, Hunan YN, Xingyuan Materials, Tianli Lithium Energy, Shangtai Technology, and Jinyang Co., have established or announced plans to set up investment companies in Singapore, targeting the Southeast Asian new energy market. Yiwei Lithium Energy is among the early Chinese battery manufacturers to set its sights on Singapore. In December 2023, Yiwei Lithium Energy's Singapore branch was officially established, marking a new phase in its global expansion. The company stated that the establishment of its Singapore office would significantly enhance its response speed to market demands and customer service capabilities in Southeast Asia. This year, the pace of Chinese manufacturers’ investments in Singapore has noticeably accelerated. In late July, Hunan YN announced its intention to establish a new investment company in Singapore, which will create a project company in Malaysia to invest in a lithium battery cathode material project with an annual production capacity of 90,000 tons, with a total investment of approximately 560 million Malaysian Ringgit, equivalent to about 950 million Chinese Yuan. Earlier in July, separator manufacturer Xingyuan Materials submitted a prospectus to the Hong Kong Stock Exchange, intending to list on the main board of Hong Kong. Xingyuan disclosed plans for a total investment of approximately 210 million Hong Kong dollars to build an operations and R&D center in Singapore, with the project set to commence in early 2026 and complete in the first half of 2028. Furthermore, Jinyang Co. announced in April this year its plan to invest in a precision structure project for lithium batteries in Malaysia, with a total investment not exceeding 90 million USD, with the project company to be established through Jinyang's wholly-owned subsidiary in Singapore. In fact, the push from Chinese manufacturers towards Singapore began last year. Shangtai Technology announced in June last year its plan to establish a wholly-owned subsidiary in Singapore to finance the Shangtai project in Malaysia, which involves building a facility with an annual production capacity of 50,000 tons of lithium-ion battery anode materials. "With the surge in global demand for electric vehicles and renewable energy storage, lithium batteries, as a core component, are seeing rapidly expanding market demand," Shangtai Technology stated, seeking to establish overseas production bases for anode materials to better serve international customers and respond to market needs. Additionally, Tianli Lithium Energy announced in March last year its intention to set up a subsidiary in Singapore to explore international cooperation channels for lithium resources and develop international trade and technology cooperation models to achieve low-cost procurement and enhance raw material sourcing and operational efficiency. Singapore, located at the southern tip of the Malay Peninsula and commanding the Strait of Malacca, is a renowned free port and international financial trade center with a highly convenient transportation and business environment. Xingyuan Materials indicated that the establishment of the Singapore center will serve as an international trade hub and regional base, coordinating sales, customer service, supply chain management, and R&D collaboration in Southeast Asia. In recent years, Southeast Asian countries such as Singapore, Malaysia, Vietnam, and Indonesia have announced proactive energy transition goals, promoting renewable energy generation and the adoption of new energy vehicles, which in turn has spurred the rapid development of local energy storage and new energy vehicle-related industries. According to international consulting firms, the electric vehicle market in Southeast Asian countries is expected to see significant growth in the coming years, with total electric vehicle sales projected to reach 80 to 100 billion USD by 2035. "Using Singapore as a strategic hub to radiate and establish production bases in surrounding countries, Chinese manufacturers can better serve clients in the Southeast Asian new energy industry," industry analysts pointed out. This strategy could also help reduce international trade friction risks and mitigate related tariff barriers, aiding in the expansion of overseas production capacity and enhancing the global competitiveness of Chinese manufacturers. Notably, 'Singapore' is not limited to Southeast Asia; it can also leverage broader global markets. For example, Tianci Materials has established a wholly-owned management company in Morocco through its subsidiary Tianci Singapore, and has signed an investment agreement with the Kingdom of Morocco to build a comprehensive electrolyte base with a planned annual production of 150,000 tons of electrolyte products and key raw materials.