# Thailand, a key link in the ‘China + One’ strategy for EV automakers - Link: https://www.thailand-business-news.com/business/140640-thailand-a-key-link-in-the-china-one-strategy-for-ev-automakers - Published: 2024-05-14T07:24:00+07:00 - Author: Olivier Languepin The “China Plus One” supply chain strategy is gaining momentum across industries due to geopolitical uncertainty and the ongoing U.S.-China trade dispute. The “China plus one” strategy involves investors adding investment in another country to their core China operations to reduce costs, spread risks, and enter new markets.** Thailand has historically been an important gateway to economic powerhouses like China and India**, as well as rapidly growing countries in the Indochina and Greater Mekong subregion. ADVERTISEMENT ## Thailand as a key link for Chinese EV automakers The ‘China +1’ strategy has seen **Thailand emerge as a key link for EV automakers, especially Chinese companies** looking to expand their footprint in the region. With its robust automotive production capabilities, Thailand offers a compelling proposition for companies aiming to scale up their EV production. **The country’s commitment to transitioning 30% of its auto production to EVs by 2030 has been a significant draw for investors.** Thailand’s strategic position in Southeast Asia has long made it an attractive hub for manufacturing and export, but recent developments have positioned it as a pivotal player in the electric vehicle (EV) industry. Craig Irwin, a senior research analyst at Roth Capital covering Tesla, suggests that **Thailand could provide a pathway to achieve auto parts costs similar to those in China, enabling low-cost production**. He explains that Thailand offers the advantage of ensuring continuity in the supply chain supporting the Shanghai facility, while being free from regulation by Beijing. Chinese automakers, in particular, have found success in the Thai market by adopting comprehensive localization strategies. Companies like BYD, Neta, and MG have gained substantial market shares, thanks in part to partnerships with established local companies and the utilization of mature retail networks. These collaborations have allowed Chinese EV makers to tap into local expertise and tailor their marketing strategies to fit Thailand’s unique market conditions. Recent reports from Nikkei Asia have revealed that Tesla has reduced the price of its Model 3 sedan by 9% to 18% in Thailand. This price cut comes as the country’s auto market experiences a downturn and as Chinese EV manufacturers like BYD and Great Wall Motor gear up to begin production there. These Chinese companies have allocated $1.44 billion for new production facilities in Southeast Asia’s second- largest economy. ### Related**Posts** ### 󠀁[Thailand’s Floods Expose Severe Vulnerabilities in Its Automotive Supply Chain](https://www.thailand-business-news.com/business/332669-floods-in-thailand-highlight-the-vulnerability-of-the-countrys-automotive-supply-chain)󠁿 ### 󠀁[Thailand Business News — Morning Briefing](https://www.thailand-business-news.com/business/332413-thailand-business-news-morning-briefing-2)󠁿 ### 󠀁[Thailand is making AI and semiconductors the focus of its next five-year development plan](https://www.thailand-business-news.com/business/332032-thailand-is-making-ai-and-semiconductors-the-focus-of-its-next-five-year-development-plan)󠁿 ### 󠀁[Unleashing Urban Productivity: How Thai Cities Can Drive High-Income Growth](https://www.thailand-business-news.com/business/330874-unleashing-urban-productivity-how-thai-cities-can-drive-high-income-growth)󠁿 ## Thai government’s incentives Moreover, the Thai government’s incentives, such as the Electric Vehicle and Hybrid Incentive Program, have attracted over $3.3 billion in investments, signaling strong support for the industry’s growth. Major players from Japan and Europe, as well as heavyweight Chinese automakers, have participated in this initiative, further cementing Thailand’s role as a burgeoning EV hub. The influx of investment and the strategic partnerships formed by Chinese carmakers are energizing Thailand’s plan to become an EV production hub. This aligns with the nation’s broader economic goals and its vision for a sustainable automotive future. As the second-largest car market in ASEAN, Thailand’s EV industry not only serves its domestic needs but also sets a precedent for other countries in the region looking to bolster their EV capabilities. Thailand has established itself as the leading car producer and exporter in Southeast Asia, hosting regional headquarters for prominent companies such as Toyota, Honda, Nissan, Ford, GM, and Mercedes-Benz. Consequently, Thailand’s ambition to become a global manufacturing hub is well-supported by advantageous tax incentives and import duties. The country is working towards converting its auto production to be EV-ready. ** By 2030, Thailand plans to have 30% of its annual vehicle production as EVs**, including 725,000 cars and 675,000 motorcycles. Motorbikes are also a significant part of the market from both manufacturing and consumer perspectives. The Thai government is offering foreign EV manufacturers significant incentives, including up to 40% cuts on import duties and a reduced excise tax rate of 2% for fully assembled EVs imported in 2024 and 2025, provided they start producing in Thailand by 2027, according to Narit Therdsteerasukdi, secretary-general of the Thailand Board of Investment. The discovery of nearly 15 million tonnes of lithium deposits in Thailand — a crucial element in battery chemistry — could also provide the country with an additional advantage over its Asian competitors in attracting electric vehicle manufacturers.