Auto & Transportation

The automobile manufacturing industry is one of Thailand's main economic pillars, accounting for about 10% of its economic output. This field not only directly employs about 850,000 workers, but also supports the development of Thailand's steel, petrochemical, and plastic industries.

Previously, comprehensive Thai media reported on May 14 that the Thai government hopes to encourage people to use electric vehicles and build basic electric vehicle infrastructure in the next few years. The country has set a long-term goal: by 2030, 50% of locally manufactured vehicles will be electric.

Thailand strives to become a Southeast Asian production center for pure electric vehicles by 2035

According to media reports, the Thai government plans to fully develop the pure electric vehicle industry, striving to transform the current traditional automobile production center into an electric vehicle production center in Southeast Asia by 2035.

Kawin, an adviser to the National Policy Committee of the Ministry of Energy of Thailand, said: "We have seen that the world is moving in this direction, so we must act quickly. We must seize the opportunity for growth in the post-epidemic period. We are absolutely capable of becoming a regional production center, because Thailand has an existing supply chain."

A few years ago, the Thai government began to actively adjust to a future-oriented zero-emission vehicle development strategy. Earlier, Thailand set a goal that electric vehicles will account for 30% of all new cars by 2030. Now this goal has been raised to 50%.

Kawin revealed that the Thai government has set a date for the phase-out of fuel vehicles. The next step is to promote this change by providing tax incentives, establishing appropriate infrastructure and enacting laws to promote electric vehicle production.

Although the electric car market in Thailand is still small, it has shown resilience under the COVID-19 pandemic. Statistics show that in 2020, sales of electric vehicles in Thailand increased by 1.4%, while sales of traditional cars fell by 26%.

In order to promote the development of the electric vehicle industry, the Thai government has provided a lot of support through tax and non-tax incentives, including: exemption of corporate income tax (CIT) (up to 8 years); exemption of machinery import tariffs; exemption of raw materials used in the production of export products Impose import duties; permit skilled workers and experts to engage in investment promotion activities; permit ownership of land; permit withdrawal or remittance of foreign currency; to manufacture BEVs (Battery Electric Vehicles) in Thailand between 2020 and 2022 The next-generation automobile industry is one of the 10 industries that can obtain additional government investment subsidies and preferential land policies in the special economic zone of the Eastern Economic Corridor (EEC) in Thailand.

According to media reports, the Thai Electric Vehicle (EV) Research Department expects that the market value of electric vehicle charging equipment in Thailand will reach 14 billion baht by 2025 due to the growth of electric vehicles in Thailand.

There are reports that global automakers are launching electric vehicles priced below 1 million baht to the market, which will attract potential buyers and ultimately promote the development of the charging equipment industry. The price of charging equipment in Thailand will drop from 100,000 baht to 40,000 baht.

In 2020, the number of electric vehicles in Thailand will increase, including battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV). It can promote the electric vehicle charging equipment market in Thailand and further increase the number of charging outlets.

Compared with other ASEAN member states, Thailand has obvious advantages

Electric vehicles are a typical capital-intensive and technology-intensive industry, and require high investment thresholds for new enterprises.

Thailand is the 11th largest automobile producer in the world. For a long time, the Thai automobile industry has maintained a certain dominant position in the ASEAN regional market, which has laid the foundation for Thai electric vehicle technology development and capital cooperation.

Thailand is also one of the markets with the highest interest and purchasing power for electric vehicles in Asia. In addition to being the largest consumer market in ASEAN, Thailand is also an important regional export base for Japanese automakers such as Mitsubishi and Toyota.

Of course, the development of Thailand's pure electric vehicle industry also faces many challenges.

Although the Thai Investment Promotion Commission BOI issued a number of investment preferential policies to promote the development of Thailand's pure electric vehicle industry as early as 2017, due to many factors, the penetration rate of Thailand's pure electric vehicle market is not high.

The preferential policies for electric vehicle investment issued by BOI in Thailand in 2017 include the following: HEV hybrid vehicles and parts manufacturing; plug-in hybrid vehicles manufacturing; BEV battery-powered vehicles manufacturing; BEB battery-powered buses and parts manufacturing; electric vehicle charging Station construction business.

Thai cars are facing increasing competition from countries such as Indonesia in the region. Since 2020, neighboring countries such as the Philippines and Malaysia have accelerated the formulation of their respective electric vehicle development plans and incentive measures.

The outbreak of the epidemic has exacerbated the shrinking of the automobile market, and continued social protests are not conducive to Thailand's economic recovery, bringing short-term profitability pressure and financial risks to heavy asset investments such as electric vehicles. In addition, Thailand’s high household debt has led the country’s government to gradually tighten car loan approvals, which may have a certain inhibitory effect on the recovery of domestic consumption of electric vehicles.

Generally speaking, compared with other ASEAN member states, such as Malaysia, Vietnam and Indonesia, Thailand has obvious advantages in the promotion of pure electric vehicles. Of course, if the Thai government wants to make Thailand a pure electric vehicle production center in Southeast Asia, it may need to make greater efforts to support the pure electric vehicle industry.