Key Supporting Factors for Sustainable Growth of EV in Thailand

• The automotive industry in Thailand is now focusing on developing technologies for electric vehicles. The government aims to make Thailand a production base for electric cars in the region.

• The government has various measures to accelerate the production and use of pollution-free electric vehicles.

• The private sector both domestic and abroad responds positively to investment in EV infrastructure and a good EV ecosystem, which helps in speeding up the sustainable growth of the Thai EV industry.

The support for domestic EV manufacturers under EV 3.5 measure, is the approved measures from the government to promote domestic production of electric vehicles with an aim to make domestically produced EVs cheaper than imported EVs. This is to motivate drivers to use more domestically produced EVs. In the first two years (2024 - 2025), import duties are reduced no more than 40 percent for imports of ready-made electric cars with a price not exceeding 2 million baht, and the excise tax rate is reduced from 8 percent to 2 percent for EVs priced less than 7 million baht. The conditions for domestic investment specify that recipients of the incentives need to produce EVs to compensate for imports by 2026 at a ratio of 1:2 (import 1 unit, produce 2 compensating units) and then increase the ratio to 1:3 in 2027.

Labor skills development is promoted in preparation for the research and development of EVs. Various agencies involved in developing personnel for this industry, such as the Ministry of Higher Education, Science, Research and Innovation, have issued a policy "EV For EV" with a plan to accelerate implementation in 3 projects: 1. EV-HRD to develop manpower skills for the electrical industry, 2. EV-Transformation to initiate the transition from using combustion vehicles to EVs in universities and agencies under the Ministry of Public Health, and 3. EV-Innovation to support the research and development of innovations for EVs. The goal of this policy is to develop Thailand into the largest EV Hub in the Asia Pacific region and to produce vehicles that do not emit pollution (Zero Emission Vehicle: ZEV) by at least 30% of Thailand's total vehicle production in 2030.

Thailand has invested in infrastructure for EVs including the setup of more than 1,664 charging stations across the country, the construction of battery manufacturing plants, and electric vehicle battery testing center especially in the Eastern Economic Corridor (EEC). There is also a campaign for public vehicles to change to electric power. For example, the Airports Authority of Thailand aims to have 1,000 electric taxis available at Suvarnabhumi Airport in 2024, while the Ministry of Transport has a plan for the BMTA to replace old buses with 2,013 electric buses in 2025, not including buses of the shared service group.

Foreign direct investments continue to come from global EV companies and battery manufacturers such as Neta Group, BYD, TESLA and FOXCONN into Thailand. This indicates the country's potential in the growing EV industry, especially FOXCONN which has established a joint venture with PTT to build a fully integrated electric vehicle production base factory on an area of over 560,000 sq.m. in the EEC area.

Thailand's famous automotive supply chain has more than 1,700 companies in the primary support industry. The efforts to expand EV infrastructure indicate a supportive ecosystem for the EV industry because the government is aiming to position Thailand as an EV hub of ASEAN.

Major automotive players from abroad such as China and Japan have announced significant investments in EV production in Thailand within the next four years. These investments include 50 billion baht from Toyota, 50 billion baht from Honda, 30 billion baht from Isuzu and 20 billion baht from Mitsubishi. These commitments reflect solid confidence and support in Thailand’s EV market. As a result, the BOI has forecast that the investment in the EV industry in Thailand will exceed 227 billion baht and ushers the country toward #10 in the world. As of now, special investment packages have been approved for businesses related to EVs with a total investment value of 77.26 billion baht.

Rising domestic and global demand underlines the confidence that the demand for electric cars in Thailand will increase in the future in line with the green vehicle trend. The stock of electric cars in the country will continue to increase. In addition, sales of electric cars around the world are increasing, which indicates a rise in global demand as well. S&P Global Mobility has forecast that the sales of battery-powered electric vehicles (BEVs) will reach 13.3 million units worldwide in 2024, accounting for approximately 16.2% of the total sales of global passenger vehicles. This is an increase from 2023 where the sales of BEVs were approximately 9.6 million units or just 12% of the market share.

From these important factors, as well as the increasing production of chips at the end of 2023 to the beginning of 2024, Krungsri Research Center has estimated that the number of newly registered BEVs in 2024 and 2025 will grow at an accelerated rate and should reach the level of 100,000 units in 2025.

Stay tuned to our blogs because we will continue updating you with interesting movements in the electric vehicle industry. And if you are looking for an opportunity to experience high-performance technologies and innovations related to automotive manufacturing industry, don't miss Automotive Manufacturing 2024, ASEAN’s number one technology exhibition for the complete production of automotive parts during 19-22 June 2024 at BITEC, Bangkok.

Key Supporting Factors for Sustainable Growth of EV in Thailand

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