The Board of Investment (BoI) looks set to offer promotional privileges to two electric vehicle (EV) manufacturers after having frozen all EV applications from carmakers for almost a year.
Approval of investment applications worth 10 billion baht for promotional privileges on EVs for two firms, one of which is Honda, will be discussed at Wednesday's BoI meeting chaired by Prime Minister Prayut Chan-o-cha, said secretary-general Duangjai Asawachintachit.
She did not disclose the other firm.
Ms Duangjai said the BoI previously approved on a gradual basis investment privileges for several firms from Japan and Europe, including Toyota, Mercedes-Benz and BMW, which asked for investment promotion in hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).
"All EV investors whose applications were approved by the BoI intend to make batteries, which are a key component of EVs," Ms Duangjai said. "We expect investment next year in automotive industries to expand exponentially, both from the carmakers themselves and parts manufacturers.''
Thirteen important EV parts makers are also entitled to BoI privileges based on the number of pieces they produce.
Ms Duangjai said Toyota seems to be making the most progress, with the Japanese giant's battery production expected to begin in the next 2-3 years.
Toyota Motor Thailand said last month that it was sticking with a plan to localise a battery plant and start production in early 2020, although there are battery shortages locally for HEVs.
Toyota makes two HEVs -- the CH-R SUV and the Camry sedan -- at its Gateway plant in Chachoengsao province.
The battery shortage is affecting car deliveries to Thai motorists, particularly the CH-R, because the vital EV batteries have to be imported from Japan.
President Michinobu Sugata said Toyota is not adjusting its plan for a battery plant in Thailand, and instead will import batteries from Japan during the three-year lag.
The battery plant is a part of Toyota's HEV project, for which it has applied for BoI privileges. Toyota was the first carmaker to receive such privileges last July.
The BoI said Toyota's total investment stands at 19 billion baht. The company assembles 7,000 HEVs a year, makes 70,000 batteries for electric cars and produces other parts such as doors, bumpers and front/rear axles, totalling 9.1 million units.
The CH-R is also the first model under the government's EV scheme, and sales volume of 20,000 units is expected locally this year.
Ninnart Chaithirapinyo, chairman of the board, said the local battery plant is expected to produce both nickel metal hydride (NiMH) and lithium-ion (Li-ion) batteries, so the facility will serve both hybrid and plug-in hybrid EVs.
But as Toyota is focusing on making and marketing HEVs in Thailand, the battery plant will assemble the NiMH parts. Li-ion is for plug-in hybrids and other EVs.