Local operators of businesses related to electric vehicles (EVs) remain upbeat about the growth prospects of the Thai EV market, as they do not expect a slump similar to the one in Europe.
EV sales in Europe declined by 11% year-on-year in March, revealing motorists' dependence on government subsidies for EV purchases, as well as hindrances such as high insurance and repair costs and limited charging facilities, according to Bloomberg.
However, local entrepreneurs expect the Thai EV market to continue growing rapidly.
DIFFERENT ENVIRONMENTS
Many factors, including prices, EV brands and charging facilities, play a role in determining the future of the Thai EV market, differentiating it from the European market.
"I don't think demand in Thailand will slow down. Even without subsidies, the cost of EVs will still be competitive and attractive to consumers," said Peerapatr Sirichantaropart, managing director of Sharge Management Co, a provider of charging systems for battery-powered vehicles.
The Thai and European markets vary, he said. Prices of battery-powered cars in Europe are significantly higher than those sold in Thailand.
The European market also has a limited variety of EV brands, while Thailand has a wider array, especially Chinese companies offering cars in a broad range of prices.
Some car models are relatively cheap and the state's EV incentive packages can lower sales prices even further, said Mr Peerapatr.
One package, dubbed EV3.5, which aims to propel EV industry growth between 2024 and 2027, comprises subsidies, reduced import duties for fully assembled cars and an excise tax cut.
EV manufacturers participating in EV3.5 are required to produce EVs domestically from 2026.
This should make EVs more affordable, increasing the number of potential buyers, he said.
Surapong Paisitpatanapong, vice-chairman of the Federation of Thai Industries (FTI) and spokesman for its Automotive Industry Club, said he believes EV prices will decrease to less than 1 million baht a unit, especially following large-scale production by domestic factories.
The directions of the EV industries in Thailand and Europe differ because the Thai government not only promotes more environmentally-friendly cars, but also wants to develop an EV production hub to export globally, said Mr Surapong.
EV-related businesses also benefit from the government's EV promotion policy, including its support for investment in EV charging facilities, which should increase the number of charging outlets in the future, he said.
The limited charging infrastructure in Europe greatly influences EV purchasing decisions, causing people to opt for internal combustion engine (ICE) cars rather than EVs, said Vasu Klomkliang, senior vice-president for strategy and investment planning at Energy Absolute Plc, a renewable energy and EV developer and operator.
The prices of ICE cars and EVs are not that different in Europe, following the launch of EV subsidies, allowing people to consider the convenience of fuelling their cars, Mr Vasu said.
Many Europeans love travelling across the region, so if charging outlets are not widely available, they will be reluctant to buy EVs, he said.
In Thailand, although charging stations are limited, electricity is significantly cheaper than oil, said Mr Vasu.
Thai laws facilitate home charging of cars more readily than in Europe. These factors contribute to the differing patterns of EV consumption between Thailand and Europe, he said.
NO EARLY CONCLUSIONS
The FTI said it is too soon to say whether the Thai EV market will follow the same path as Europe because the country has just begun to grow its EV industry in recent years.
"We believe we will have to wait 4-5 years to see the EV situation in Thailand more clearly," said Mr Surapong.
The government's EV incentive packages will have ended before that time and the automotive industry can determine whether EV sales will be affected when subsidies and tax cuts are absent, he said.
Many factors led to the decline in EV sales in Europe, in addition to the expiry of subsidies, said Mr Surapong. European countries are struggling with an economic slowdown, attributed to geopolitical conflicts, as well as higher energy costs, which are affecting the auto market, he said.
In March, combined sales of ICE cars and EVs in Germany fell by 6.3%, according to the FTI, and dipped in France (-1.5%), Italy (-3.7%) and Spain (-4.7%).
Only the UK reported a sales increase in March.