A recent uptick in electric vehicle sales may not signify a smooth path for the Thai EV industry following double-digit growth.
From January to April, domestic sales of battery EVs (BEVs) soared by 46% year-on-year to 33,633 vehicles in the passenger car category, compared with a decrease of 13% for internal combustion engine (ICE)-powered vehicles to 48,784 units, according to the Automotive Industry Club of the Federation of Thai Industries (FTI).
Some 3,543 plug-in hybrid EVs (PHEVs) were sold, a surge of 409%, while hybrid EV (HEV) sales fell by 11% to 41,228 units, though the latter were the most popular EV type, gaining a 20% market share, second to 24% for ICE-powered cars during the first four months of 2025.
Despite the impressive sales figures, there are growing concerns over intensifying competition among EV manufacturers and the ongoing downturn in the Thai automotive industry.
The EV price war includes many companies, notably BYD, as they seek to lift their sales in Thailand. Hozon Auto, the parent firm of Neta Auto Thailand, is struggling to deal with financial troubles, while Great Wall Motor (GWM) adjusted production to sell more diesel-fuelled cars.
Meanwhile, prospective buyers are concerned about high EV maintenance costs, including expensive battery prices, causing hesitation when considering a vehicle purchase.
Additional factors for buyers comprise rising premiums for EV insurance policies and weak purchasing power that influenced banks to enact strict auto lending criteria.
PROTRACTED PRICE WAR
EV companies will continue to face tough competition fuelled by a price war, which is likely to continue as long as the economy remains sluggish, said Kriengkrai Thiennukul, chairman of the FTI and a member of the National EV Policy Committee.
"The bad economy makes people more cautious about spending, so some Chinese EV makers resorted to a price war to stimulate sales," he said.
In fact, Chinese manufacturers have encountered a decline in EV sales in many countries, not just Thailand, which led them to pursue more aggressive sales measures, said Mr Kriengkrai.
He commented after BYD announced a price cut for 22 of its car models, including the Seagull EV, which sold for 55,800 yuan, or roughly 255,000 baht, even cheaper than some motorcycle brands.
This pricing strategy was launched early this year and intensified in May. BYD said it wants to clear stock and increase sales.
This piled pressure on Chinese competitors, which responded with similar sales promotions. Non-Chinese rivals then offered discounts to customers to maintain their market share.
"Eventually, only the strongest will survive in the EV business," said Mr Kriengkrai.
Chinese EV makers want to increase sales, while China wants to become No.1 in manufacturing EVs for export, he said.
In Thailand, the price war among some car brands is expected to continue this year, but may lose steam in a sluggish domestic market, as prospective buyers face obstacles obtaining auto loans, according to Narong Sritalayon, chief executive of Thonburi Neustern Co, a distributor of EVs under the Geely brand.
Banks and car financing companies are tightening their lending criteria to avoid non-performing loans, as Thailand is plagued by a high level of household debt.
Though Thailand's household debt-to-GDP ratio was 88.4% last year, down from a peak of 95.5% in 2021, the country's household debt ratio remains high compared with regional peers.
In Thailand, the Joint Standing Committee on Commerce, Industry and Banking announced its latest GDP growth forecast, expecting growth of less than 1% in the second half of this year, resulting in 2025 GDP growth of 1.5-2%.
The price war in the Thai EV market is expected to end next year, said Sun Baolong, head of Southeast Asia business for Hozon Auto.
He said EV makers engaging in the price war should recognise how it affects their brands and customer trust.
A price war makes prospective buyers reluctant to purchase new cars because they anticipate prices may fall further.
Mr Kriengkrai said he believes the price competition will not have a severe impact on customer trust.
"I believe buyers will learn a lesson. They will learn which EV brands most suit them and they will focus more on the technology," he said.
Visitors get the feel of a Neta EV at a motor show. The company is dealing with financial difficulties. (Photo: Varuth Hirunyatheb)
ADAPTABLE POLICIES
EV companies have adjusted their production or restructured management teams to ensure they can best serve customers.
GWM (Thailand), a subsidiary of China-based GWM International, is focusing more on manufacturing diesel-powered cars, though the company has spent several billion baht investing in an EV factory and business in Thailand.
The company previously announced it would spend 23 billion baht developing production facilities for BEVs and battery cells. GWM already allocated 12 billion baht for the investment, with the remainder expected to be spent over the next three years, said Parker Shi, president of GWM International.
"We're not deprioritising EVs," said Wayne Zhou, managing director of GWM (Thailand).
"We're simply expanding our portfolio to include more diverse offerings that align with what Thai consumers want."
The company is using a multi-powertrain strategy, offering a variety of powertrain options to suit the diverse needs of consumers across different markets, he said.
In Thailand, GWM has a comprehensive powertrain lineup of HEVs, PHEVs and BEVs, recently adding the GWM Tank 300 Diesel, which has received an overwhelming response from Thai consumers, according to the company.
The Thai auto market is roughly a 50/50 split between ICE vehicles and new energy vehicles, which is a major factor why GWM decided to introduce diesel options, said Mr Zhou.
"We can better meet the real-world demands of Thai users, but we remain fully committed to our EV business," he said.
A variety of car models on display at the 46th Bangkok International Motor Show held in April. Manufacturers compete to draw customers by offering attractive sales promotion campaign. (Photo: Varuth Hirunyatheb)
GOVERNMENT SHIFT
Even the government, which heavily promotes the production of BEVs, has not abandoned ICE technology as it adjusted tax incentives for PHEVs, which are chargeable vehicles that use both ICE and electric motors.
In April, the cabinet approved a lower excise tax for PHEVs with a longer driving range.
Authorities want to increase automotive investment during the transition from ICE to next-generation vehicles, said Deputy Finance Minister Paopoom Rojanasakul.
Meanwhile, Hozon Auto is pushing ahead with reform, restructuring management teams and talking with trading partners about turning the company's debt into shares for creditors as well as raising funds, aiming to ease the firm's financial shortcomings, according to Neta Auto Thailand.
A new board of directors of Neta Auto Thailand, with representatives from the headquarters in China, is expected be established by June 12.
Neta Auto Thailand denied a news report that alleged its parent firm is involved in a bankruptcy case.
The firm is facing a complaint lodged with the court to inspect its debt repayment capability, noted Neta Auto.
Cars are showcased at the Fast Auto Show Thailand & EV Expo. High levels of debt are limiting auto loans. (Photo: Wichan Charoenkiatpakul)
IMPACT ON CUSTOMERS
Guillaume Mirabaud, chief executive of AXA Insurance Thailand, said the financial difficulties of Neta calls into question the business model of some Chinese EV brands, which will affect customers' decisions to buy EVs and EV insurance policies in the future.
"The situation with Neta is not good news, in terms of both the company's survival and the impact on Neta customers struggling to get their cars repaired because of a lack of spare parts from the car manufacturer," he told the Bangkok Post.
However, Neta assured its customers of responsive after-sales service after it opened a new spare parts distribution centre in Nakhon Pathom in May.
According to Mr Mirabaud, numerous subsidies were provided by the authorities to Chinese EV makers initially. The regulator should now seek further guarantees from them to ensure smooth business continuity and customer satisfaction over the coming years, he said.
"These recent developments carry an important message to customers too: look beyond price comparisons to include the insurers' solvency positions," said Mr Mirabaud.
"Insurers with strong solvency positions can carry these risks instead of passing them on to customers."
Lars Heibutzki, chief executive of Allianz Ayudhya General Insurance, said this situation may affect the auto industry broadly by hurting consumer confidence in terms of the resale value for certain EV models.
While Neta Auto Thailand denied the bankruptcy report and opened a spare parts distribution centre, Mr Heibutzki said he understands policyholders that are concerned.
"If the parent company's financial condition worsens, potential delays in parts availability could impact repair timelines and costs, which may lead to higher insurance premiums or stricter coverage terms for Neta owners," he said.
"We could also see some insurers limiting coverage for brands where long-term after-sales support is uncertain."
CLOUDY OUTLOOK
According to Mr Mirabaud, 2024 was a poor year for motor insurance, with "red plates" decreasing by more than 20% in a tough economic environment.
"This year was expected to bring some relief. However, as of the first quarter, this has not been the case, as credit conditions remain quite strict, while uncertainties accumulate," he said.
"However, the sales volume is projected to grow over the rest of the year, and we expect a rebound. Growth remains steep for EV sales thanks to the price war among original equipment manufacturers selling EVs, especially Chinese entities."
Mr Mirabaud said the profitability of EV insurance is "not good", with most insurance players posting losses that are diluted in the overall motor portfolio.
"The poor profitability is attributed to the high price for parts, especially batteries, driving costs higher. Pricing should be revisited in the short term to address this issue, and specialised EV insurance offers should be available to customers," he said.
"AXA Thailand has said consistently that this is necessary for the market to develop."
Other insurance executives shared a similar view, noting if the troubled automaker exits the market, insurers may be forced to source parts independently and establish their own certified repair networks to fulfil claims.
A market exit could also increase compensation costs for policyholders experiencing extended waiting times for repairs, they said.