Mercedes-Benz to make EVs in Thailand

Mercedes-Benz to make EVs in Thailand

Deal with government includes lower taxes on imported EVs in exchange for commitment to local manufacturing

Mercedes-Benz showcased its fully electric EQS 500 model at the Thailand International Motor Expo in Bangkok last week. (Photo: Kingsley Wijayasinha)
Mercedes-Benz showcased its fully electric EQS 500 model at the Thailand International Motor Expo in Bangkok last week. (Photo: Kingsley Wijayasinha)

Mercedes-Benz Group has committed to manufacturing electric vehicles in Thailand after signing an agreement to import its battery-powered cars as part of a government plan to bolster the country’s status as a clean automaking hub.

The luxury carmaker will receive benefits including lower import duties and excise taxes for each fully electric car brought into the country by its Thai unit through 2023, said Ekniti Nitithanprapas, director-general of the Excise Department. 

A memorandum of understanding signed with the government also binds Mercedes to making electric car models in Thailand, likely at its plant in Samut Prakan. Mr Ekniti didn’t say which models that may include or when production may start. The local Mercedes facility has to date been used to assemble combustion engine cars and it recently started producing EV batteries.

At the Thailand International Motor Expo last week, Mercedes displayed a fully electric EQS 500 car, which Roland Folger, chief executive of Mercedes-Benz Thailand, said was “the first local production made outside of Germany”. Mr Folger didn’t elaborate on the model’s production timeline.

Mercedes is the latest global brand to enter Thailand’s electric passenger car market — an arena where new Chinese entrants are challenging legacy Japanese and European automakers. Earlier this week, Tesla  opened bookings for two of its EV models, which should be available by the first quarter of next year.

The Chinese automaking giant BYD, meanwhile, has started selling its first electric SUVs in Thailand and said in September it has signed a land-purchase deal to build its first EV plant in Southeast Asia.

Thailand has a comprehensive automotive supply chain that feeds scores of factories owned by many of the world’s largest carmakers including Toyota, Ford and Honda. The government has said it wants 30% of local car sales to be electric by 2030 and earlier this year allocated about 43 billion baht through 2025 to achieving that goal.

The government has paid out 81 million baht in subsidies for the around 540 electric cars purchased in Thailand so far, according to Mr Ekniti.

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