FOMM Asia first to win BoI perks to make battery EVs
Thai-Japan joint venture FOMM Asia Co is the first carmaker under the government's electric vehicle (EV) scheme to win Board of Investment (BoI) incentives to manufacture battery EVs, as other makers have joined hybrid and plug-in hybrid EV schemes.
The production of battery EVs requires more advanced technology than two other EV versions, which still rely on petrol and diesel fuel. The government has expressed intentions for battery EVs to be produced locally.
On Sept 18, the BoI approved FOMM Asia's investment project and issued a licence. The project was categorised under A3 privileges, enjoying a five-year corporate tax exemption and a tariff exemption for imported machinery.
On Tuesday, FOMM Asia announced it had spent 1 billion baht to make 10,000 battery EVs a year at Amata City Industrial Estate in Chon Buri province.
The plant is undergoing a test run, and FOMM plans to start operations in January 2019.
The FOMM One is the first model to be assembled at the facility.
Chief executive Hideo Tsurumaki said Thailand was selected as FOMM's production base for compact battery EVs to serve the local market and export to overseas countries because the country's automotive industry has many strong support industries.
The government has supported the automotive sector for six decades and is keen on the EV scheme, he said.
Mr Tsurumaki said FOMM aims to apply for further BoI privileges because the plant is located in the flagship Eastern Economic Corridor scheme.
"We will get another five-year corporate tax exemption," he said.
FOMM's investment project has been postponed for almost a year.
Mr Tsurumaki said the process of seeking potential suppliers took longer than FOMM expected, as it aims to use local parts more than imported ones.
The FOMM One consists of 1,600 auto parts, with 75% from local suppliers.
"The vital parts for battery EVs are imported, such as batteries and electric motors," Mr Tsurumaki said. "The Singapore supplier provides lithium-ion battery cells."
The FOMM One is equipped with a 12-kilowatt-hour battery and a 10-kilowatt electric motor with a driving range of up to 160 kilometres and a maximum speed of 85km per hour.
This compact EV weighs 445 kilogrammes and starts at a retail price of 664,000 baht.
The FOMM One is categorised as a heavy quadricycle, also known as the L7e under the European standard.
The FOMM One can be registered at the Land Transport Department as a compact EV, similar to the Toyota Ha:mo that is being used as a car sharing platform at Chulalongkorn University, so the compact EV can be driven legally on local roads.
Mr Tsurumaki said the FOMM One will be delivered to Thai motorists from February 2019 onward, and 355 cars have already been booked.
He expects to sell 2,500 cars in the first year and reach 10,000 cars by 2021.
"FOMM is committed to export this compact EV to other markets, but it has to study demand and the regulations in each country, with right-hand- drive markets as the first destination," Mr Tsurumaki said. "Once we make a decision to export, the plant in Chon Buri has to increase production capacity to 30,000 cars per year."
FOMM Asia Co was established locally in February 2016 with 360 million baht in registered capital. The company is affiliated with Kanakawa-based FOMM Corporation.
FOMM and Thai partner Trinex Assets Co hold a 49.9% stake each, while 0.2% belongs to Kusumoto Chavalit & Partners.