Thailand will provide incentives and tax breaks for carmakers setting up electric vehicle research and development centres, as it seeks to build on early success as a regional EV frontrunner, according to Narit Therdsteerasukdi, secretary-general of the Thailand Board of Investment.
The country for decades has been the largest car producer and exporter in the region, with Japanese manufacturers including Toyota, Isuzu and Honda dominating the sector.
Thailand now aims to convert about 30% of its annual production of 2.5 million vehicles into EVs by 2030 and is preparing incentives to encourage more investment and conversion to EV manufacturing.
“Research and development activities are one of our top priorities because we would like to strengthen our competitiveness,” Mr Narit told Reuters.
Tax breaks and grants would be given on automakers committing to R&D investment in Thailand, and additional incentives would be available if they move their regional headquarters to the country, he said.
He did not provide details on how much overall support would be worth.
Various Chinese carmakers have committed to invest $1.44 billion in new production facilities in the country. BYD, which has a 14% share of all global EV sales, second to tesla with 22%, is investing nearly $500 million to produce 150,000 EVs a year.
BYD’s rival, Great Wall Motor, said in May that it was considering setting-up an R&D centre in Thailand that could work on battery-powered pickup trucks, a mainstay of the Thai auto market.
Japanese automakers including Toyota, Honda, Nissan and Mitsubishi, which already have R&D centres in Thailand, would be encouraged to work on EVs in the country, Mr Narit said.
“We will support the existing automakers to transition to EVs,” he said.
Spurred by a government subsidy of up to 150,000 baht per vehicle, EVs have enjoyed strong sales in the country this year, accounting for about half of all EV sales in Southeast Asia in the second quarter of the year.
The new “EV 3.5 package”, which is likely to include a purchase subsidy reduced to 100,000 baht per vehicle, should be finalised later this year and rolled out by January, Mr Narit said.
The scheme will cost about 3 billion baht, the Fitch-affiliated research firm BMI said in a report last month.