Gearing up EV production
The news on electric vehicles in Thailand has ramped up considerably over the last year and even in just the last month, as companies actively respond to the government’s efforts and well-designed policy to make the country an EV hub and its strategies begin to take shape through concrete activities on the part of numerous companies. Neta Auto made its debut in the country unveiling its electric city car which will be available through a network of 30 dealers nationwide by the end of this year. The company is joining with PTT subsidiary, Arun Plus, in creating an EV ecosystem, as well as the assembly of Neta vehicles creating a production hub for the ASEAN region. This was followed by BYD Co. making a splash with their land purchase in the Eastern Economic Corridor (EEC) with WHA Corp., Thailand’s largest industrial estates developer, to build its first electric vehicle production plant in Southeast Asia. Underscoring the importance of EV production, BYD’s investment marks WHA’s most significant deal in 20 years. Previously announced in May was the $1 billion deal between Foxconn and Arun Plus, through their new venture, Horizon Plus, to develop and manufacture EVs in Thailand, with completion of their factory expected in 2024.
Enhanced incentive opportunities
Taken together, these recent activities bode well for the Thai government’s key goal of producing 30% EVs out of total autos production by 2030. This testifies that the revised incentives and conditions unveiled earlier this year in April by the BOI are having the desired effects. A key component in driving this effort is to boost domestic sales of EVs, which are forecast to sharply increase in light of higher oil prices and government subsidies which the aim to attract an increasing number of buyers to create economies of scale. This, in turn, will encourage further investments in the sector creating a positive feedback loop, with a two-stage plan which will first encourage drivers to switch to EVs regardless of origin, before eventually prioritizing domestic EV models. The shift to EVs is opening up opportunities for companies. For instance, Great Wall Motor and MG have already introduced three EVs in Thailand which have quickly become popular among buyers establishing both a brand presence and increased awareness of and interest in EVs.
Ensuring a complete ecosystem
Thailand has developed a strongly favourable and evolving policy environment providing the right push for the EV market and accelerating the development of EV production and its related value chain through enhanced measures. The BOI’s revisions were made recognising the need to ensure that the incentives remain relevant in a fast-changing business environment, while also allowing investors, particularly SMEs and startups, to have increased access to BOI benefits, and to manage their costs more effectively. Moreover, the revised measures abolish two requirements, namely, the condition barring investors from receiving additional benefits from other agencies, and the requirement for ISO certification. And while EV production begins to ramp up, the necessary supply chain and related infrastructure that goes with it is also being developed. On this score, the BOI has approved three to five-year tax holidays for charging service providers. With more than half of Thailand’s charging stations located in the Bangkok metropolitan area, the incentives, as with EV production, can further spur investments ensuring a more extensive charging network throughout the country, resulting in higher uptake by consumers.
Automotive transformation underway
PTT is taking the lead on the battery front by partnering with companies such as GPSC, specializing in battery manufacturing, and conducting R&D to improve battery technology. The two companies opened the first semi-solid battery production facility in Southeast Asia in the EEC, making Thailand only the third country with such a facility in Asia after China and Japan. With rapidly increasing interest in Thailand, EVs are a game-changer in the context of electrification and decarbonization, and an important element in the country’s transition to a sustainable and cleaner economy. This movement is being driven by the tremendous interest and coordination of a range of stakeholders, including the public sector, companies, entrepreneurs, suppliers, and consumers, which, as part of their own carbon journeys, are pushing the EV movement. The unfolding story is that the new components, batteries, chips and charging stations will have a far-reaching impact on technology manufacturing, powering Thailand into a future that combines vehicle production with digital and tech innovations bringing renewed meaning to the country as Asia’s third largest and the world’s number ten auto manufacturer.