EV Manufacturing in Thailand – Opportunities for the Future

Thailand, now the 10th largest global manufacturer of motor vehicles, has set bold targets for production of electric vehicles (EVs) with a range of recent policy initiatives from the government as well as the Thailand Automotive Institute (TAI). EV manufacturing in Thailand looks strong with 26 recently approved private initiatives from international vehicle and battery manufacturers prompted by comprehensive incentives including duty exemptions, subsidies and tax breaks.

Thailand is well regarded for its established automotive sector. This infrastructure along with a favourable business environment including business-friendly policies, an ideal geographic location and ready access to required raw materials suggesting a promising future for EV manufacturing in Thailand. As the Thai government develops policies to improve its own carbon footprint and encourage various forms of alternative energy production, a consistent reduction of ICE engines on Thai roads works towards clear policy objectives. This largely commenced with the Electric Vehicle Policy Framework in 2017, which set a target of 1.2 million EVs on Thai roads by 2036.

This target was significantly updated in March 2022, where the goals were brought forward to 1 million EVs by 2025 and 15 million EVs on Thai roads within ten years. These EVs include commercial vehicles, buses and trucks as well as private cars.

In recent months alone, 26 international investment projects have been approved by Thailand’s Board of Investment (BOI) totalling over USD 2 billion and that will lead to improvements in all elements of the EV ecosystem including parts, batteries, charging stations and a raft of related technologies.

Several of these approved projects include Chinese automakers, relatively new to the market and that includes a significant partnership between Taiwan’s electronics manufacturer Foxconn and Thai energy conglomerate, PTT. Other Chinese vehicle manufacturers signing deals in Thailand include GWM, MG, BYD and DFSK, these likely to challenge the lower end of the market. However more traditional car makers signing deals in Thailand include Mercedes and BMW who will be producing their top EV and hybrid models in Thailand for the first time as well as Japanese manufacturers also joining the party with new deals being signed by Mitsubishi, Nissan and new Japanese EV manufacturer, FOMM.

In February this year, the government also announced a major initiative in their new battery electric vehicle (BEV) incentive package. This included an import duty reduction of up to 40%, a revised excise tax cut from 8% to 2% and large cash subsidies for BEV buyers. This stimulus package is intended to jump start BEV sales with imported models but manufacturers will be expected to offset imported models with a local production ratio of 1:1 by 2024.

According to the Federation of Thai Industries Automotive Industry Club, total EV production in Thailand for 2022 was over 90,000 units, an increase of 40% on the previous year. Domestic sales in the same period increased 87% to 73,000 units, despite Thailand currently having a deficient public charging infrastructure. Plans are afoot to correct this, with the government announcing a target of 25,000 charging stations nationwide by 2036. The public appetite for EVs will be further stimulated by generous purchase subsidies ranging between 20,000 and 150,000 baht per vehicle.

Challenges facing the industry, as well as the low present number of charging stations, include a lack of sufficiently skilled workers where EV manufacturing requires specific skillsets, although steps are under way to implement a standardised national skills framework.

Opportunities abound for EV manufacturing in Thailand, for companies involved in any aspect of the technology of EV production. The Thai government is very much open for business in this sector with a range of benefits and incentives provided towards successful market entrants.

Asian Insiders is available to assist clients with comprehensive reports and research to any sector related to EV manufacturing in Thailand. For a no-obligation call, please contact Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com or Axel Blom, Thailand Partner, axel.blom(at)asianinsiders.com

See related articles and case studies for:

Help Us Improve
Our Website

Please take our quick survey (it only takes a minute). We appreciate your feedback!