The Board of Investment (BoI) in Thailand is expecting a significant increase in the production of electric vehicles (EVs) in the country.
Companies like BYD, GAC Aion, and Changan Automobile are set to start producing EVs in Thailand, with production targets of 150,000, 50,000, and 100,000 EVs annually respectively.
- Chinese electric vehicle manufacturers BYD, GAC Aion, and Changan Automobile are set to significantly increase their output in Thailand, aiming to produce a total of 300,000 electric vehicles annually.
- The Board of Investment (BoI) is actively promoting the growth of the EV industry in Thailand by granting investment incentives to EV-related businesses, including battery production and EV charging facilities.
- The push for local manufacturing and sourcing of materials by Chinese EV makers is expected to contribute to the development of a regional EV production hub in Thailand, with up to 90% of EV components sourced locally.
Other manufacturers like Great Wall Motor (GWM), Neta, and SAIC Motor-CP have already begun EV production in Thailand.
The BoI is providing investment incentives to support the growth of the EV industry, including battery production and EV charging facilities. Chinese EV makers have also committed to sourcing up to 90% of EV components locally, indicating Thailand’s potential to become a regional EV production hub.
Thailand has implemented a range of incentives to accelerate the adoption of electric vehicles (EVs), reflecting its commitment to a greener future and its ambition to become a regional EV hub. These incentives are designed to make EVs more affordable and attractive to consumers and manufacturers alike.
Here’s a breakdown of the specific incentives:
- Duty Reduction Privileges: For imported completely built-up (CBU) EVs, Thailand offers duty reduction privileges. For instance, CBU EVs with a battery size over 10 kWh and a suggested retail price (SRP) of less than 2 million THB can enjoy a reduced import duty rate from 80% to 40%. If these vehicles are imported under a Free Trade Agreement (FTA) with a duty rate of less than 40%, they are exempt from import duty.
- Excise Tax Reduction: The excise tax for BEV passenger cars has been reduced from 8% to 2%, and for BEV pick-up trucks, the tax is set at 0%. This significant reduction aims to lower the final cost to the consumer.
- Excise Tax Subsidy: An excise tax subsidy is available for electric motorcycles, pick-up trucks, and passenger cars, applicable to both imported and locally produced BEVs. This subsidy supports eligible manufacturers who also import CBU BEVs during 2022-2023, provided they offset production by producing any model of vehicle or vehicles similar to the imported models at an import to local production ratio of 1:1 by the end of 2024.
- Customs Duty Reductions and Exemptions: Specific regulations have been approved that provide customs duty reductions and exemptions for certain types of imported EVs. This includes a 40% reduction of customs duty for EVs with a retail price up to 2 million THB and a 20% reduction for those priced between 2-7 million THB. If the applicable customs duty is already less due to an FTA, the EVs may be exempt from customs duty.
- Tax Deductions and Cash Grants: Special tax deductions are available for companies purchasing electric trucks and buses, along with cash grants for manufacturers of EV battery cells. These measures aim to reduce pollution and support companies in reaching net-zero targets.
These incentives are part of a comprehensive package from 2022 until 2025, aimed at increasing the demand for EVs, attracting investment in the EV industry, and encouraging the local manufacturing of EVs. By making EVs more financially accessible and supporting the industry’s growth, Thailand is positioning itself as a leader in the EV revolution in Southeast Asia. For more detailed insights into these incentives, you can explore the information provided in the sources.
In a bold step, BYD and Great Wall Motor have committed to investing $1.4 billion to establish a new EV production and assembly plant in Thailand. This investment is a clear indicator of the confidence that Chinese automakers have in Thailand’s potential as a manufacturing base for EVs, aiming to cater to both domestic demands and international exports.
Chery Automobile China is also contributing to this growth trajectory, with plans to produce 50,000 units of electric and hybrid vehicles by 2025. This aligns with Thailand’s vision, often referred to as “Detroit of Asia,” to diversify its well-established automotive manufacturing industry, traditionally dominated by petrol, diesel, or LPG-powered vehicles.
The registration of electric vehicles in Thailand has seen a remarkable increase, quadrupling to almost 90,000 units per year, which accounts for around 10% of the country’s total vehicle sales. This surge is supported by new subsidies, tax reductions, and the growing presence of Chinese carmakers, who now command more than half of the EV market share.
The strategic location of Thailand, coupled with China’s advanced EV sector and the Shenzhen seaport’s proximity for high-tech components, provides a synergistic advantage for the production and export of EVs. Thailand’s government is backing this initiative with an ambitious goal to attract $28 billion in foreign investment over the next four years, bolstered by special incentives to encourage such investments.
The influx of Chinese EV manufacturers is a testament to Thailand’s conducive business environment and its commitment to becoming a major player in the global EV market. With the projected increase in production capacity and the establishment of new facilities, Thailand is well on its way to becoming the EV production powerhouse of the region.
This development holds promise for a greener future and a shift towards sustainable transportation solutions. As the world moves closer to embracing electric mobility, Thailand’s strategic partnerships with Chinese automakers could set a precedent for other nations looking to transition into the EV space.
In addition to China, South Korea and Japan are making their mark as top investors in the EV supply chain. South Korean automaker Hyundai, for instance, pledged more than $11.6 billion to EV projects in 2022, including a significant investment in the United States.
Canada and the United States have set ambitious EV sales targets, aiming for 60% and 50% by 2030, respectively. These targets are part of broader initiatives to promote electric vehicles and reduce reliance on fossil fuels.
The European Union is also a significant contributor to the global EV landscape, with a growing number of electric cars on its roads. The collective efforts of these countries are not only shaping the future of the automotive industry but also contributing to the fight against climate change.
The global EV market is expected to continue its exponential growth, with sales needing to reach 75% to 95% of passenger vehicle sales by 2030 to align with international climate goals. This target seems achievable given the current trajectory and the increasing rate of adoption.
As the EV industry evolves, we can anticipate more countries to join this list, investing in EV production and infrastructure to meet the rising demand for cleaner, more efficient vehicles. The shift towards electric mobility is a critical component of the global strategy to achieve a sustainable and environmentally friendly future. For more insights into the global EV market and the countries leading the way, keep an eye on the latest industry reports and analyses.