Thailand's eco-car segment is likely to face stronger competition from electric vehicle makers as Nex Point Plc, a local assembler of commercial EVs, has teamed up with a Chinese EV maker to embark on a new investment in small EVs.
Nex Point signed a strategic cooperation agreement with Chinese automaker Dayun Automobile Co on a joint project to produce small passenger EVs in Thailand, according to a letter recently submitted to the Stock Exchange of Thailand.
"We will start by importing small electric sports utility vehicles [SUVs] under the Yuehe brand for marketing purposes, aiming to test the consumer response," said Khanist Srivajiraprabha, chief executive of Nex Point.
Sales of Yuehe SUVs will help determine the feasibility of further investment in producing EVs for sale in Thailand and for export, he said.
Mr Khanist said Nex Point is considering participating in the state EV incentive package, dubbed EV3.5, to sell the SUVs at prices below 490,000 baht.
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 joining EV3.5 are required to produce EVs domestically from 2026.
The incentive is part of government efforts to make Thailand a regional EV production hub.
Nex Point decided to venture into manufacturing small EVs because it sees a business opportunity in the eco-car segment, with new car registrations of 100,000 vehicles a year, he said.
Eco-cars have small engines to help drivers save energy.
Nex Point is assembling buses, pickups and tractor heads at its factory in Chachoengsao's Ban Pho district. The annual production capacity of these three types of vehicles are 9,000, 20,000 and 30,000 units, respectively.
The cooperation between Nex Point and Dayun Automobile Co emphasises the presence of Chinese EVs in the Thai market. Seven Chinese EV manufacturers earlier vowed to use Thailand as their production base: BYD, MG, Great Wall Motor, Neta, Changan Automobile, GAC Aion and Chery Automobile, which operates an EV assembly facility through its subsidiary Omoda & Jaecoo (Thailand) Co.