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While Japanese, Chinese, and Korean (RoK) firms scramble to get in at the outset of EV production in the region, Indonesia and Thailand have emerged as two of the most popular Asian locations for investment in parts and materials for EVs, according to Nikkei Asia, a news agency in Japan.
Thailand is the region’s largest auto producer but is still relatively new to the EV game and EV supply chain. However, in recent years, it has become a major destination for investment in parts and materials for electric vehicles, as well as a regional manufacturing base for EV makers from Japan, China, South Korea and Germany.
Thailand has attracted global giants such as Toyota, Mitsubishi, Mercedes-Benz, Great Wall and SAIC with its government incentive plan, its skilled workforce, its strategic location and its green growth vision. Thailand aims to produce 1 million EVs by 2025 and become a net-zero carbon economy by 2065.
Some of the key components that Thailand produces for EVs include batteries, motors, chargers, converters, and high-performance resins.
Increasing number of EV supply chain-related investments
As part of an increasing number of EV-related investments in the country, Japanese plastics manufacturer Kuraray recently launched its first plant there in a partnership with Thai petrochemical giant PTT Global Chemical and Japanese trading house Sumitomo Corp.
Some of the notable EV supply chain projects in Thailand also include Hyundai Motor’s EV production plant, BYD’s EV assembly plant, Kuraray’s resin production plant, and CATL’s battery joint venture with Indonesia’s sovereign wealth fund. Thailand also plans to increase its domestic EV sales and promote green mobility among its citizens.
The plant produces Kuraray’s high-performance Genestar resin, which has a higher heat resistance than standard resins and is used for high-voltage parts around vehicle batteries.
Kuraray President Hitoshi Kawahara claims that by about 2026, the business will explore making more investments in Thailand on a par with the new factory, which cost US$520 million to build.
Incentives were offered by Thailand in 2022 to encourage the switch to electric vehicles, and Chinese and Japanese automakers responded.
BYD intends to open a plant with a 150,000-vehicle production capacity the following year. Great Wall Motor, which is currently selling in Thailand, and MG Motor, which is owned by SAIC Motor, also intend to begin manufacturing there.
Thailand as a hub for electric vehicle (EV) production?
Thailand is well-known as a major hub for conventional automaking in Southeast Asia, but it is also emerging as a leader in electric vehicle (EV) production. The country has attracted several global and regional players who are investing in EV supply chain, manufacturing and battery technology, thanks to its favorable government policies, strategic location, and skilled workforce.
BOI’s incentive plan
One of the key drivers of Thailand’s EV revolution is the Board of Investment (BOI), which offers various incentives for EV production of all types, including tax holidays, import duty exemptions, and subsidies. The BOI aims to promote EV sales, EV supply chain, and production in Thailand, as well as reduce greenhouse gas emissions and dependence on fossil fuels.
Some of the notable companies that have signed up for the BOI’s incentive plan include:
- Mercedes-Benz: The German luxury carmaker plans to start producing its fully-electric EQS model in Bangkok by the end of 2022, making Thailand its first location in Southeast Asia and one of only seven locations in the world to manufacture the high-performance lithium-ion batteries that power the vehicle.
- Toyota: The Japanese auto giant, which is the world’s and Thailand’s largest vehicle manufacturer, has announced that it will launch 10 new EV models in Thailand by 2025, including hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV), battery electric vehicles (BEV), and fuel cell electric vehicles (FCEV).
- Great Wall Motor and SAIC Motor: The Chinese automakers, which have helped China become the world’s number one EV market by volume, have chosen Thailand as their regional manufacturing base for ASEAN. Great Wall Motor plans to produce 80,000 EVs per year in Thailand by 2023, while SAIC Motor aims to produce 50,000 EVs per year by 2024.
- BYD: Another Chinese EV maker, BYD has recently signed a deal to set up a facility in Rayong province to produce 150,000 passenger cars per year from 2024. The company also intends to sell 10,000 units in Thailand and export to Southeast Asian and European countries.
Thailand’s EV production is not limited to passenger cars
The country also has a vibrant market for electric motorcycles, buses, trucks, and even tuk-tuks. According to the Electric Vehicle Association of Thailand (EVAT), there are more than 100,000 electric motorcycles on Thai roads as of 2021, and the number is expected to grow rapidly in the coming years. Moreover, Thailand has launched several pilot projects to test the feasibility of electric buses and trucks in urban areas, as well as electric tuk-tuks for tourism purposes.
Thailand’s EV revolution is not only good for the environment and the economy, but also for the consumers. The government has implemented various measures to stimulate demand for EVs, such as lowering excise taxes, providing subsidies for charging stations, and expanding the charging network. As a result, EV prices have become more affordable and competitive with conventional vehicles.
Thailand has shown its potential and ambition to become a major player in the global EV industry. With its supportive policies, strategic location, and skilled workforce, Thailand is well-positioned to capitalize on the growing demand for clean and efficient transportation solutions.