Thailand's Electric Vehicle Race Heats Up

In a significant stride within Thailand’s electric vehicle (EV) sector, Honda has announced plans to kickstart the production of the Honda e:N1 EV at its Prachinburi province facility. The product is set for domestic launch in Thailand in the first quarter of 2024, marking a major milestone as Honda becomes the first prominent Japanese EV manufacturer to produce EVs domestically in Thailand.

Thailand, recognized as a significant automotive hub in Southeast Asia, stands out in the burgeoning electric vehicle market. As the eleventh-largest automotive industry worldwide, Thailand prides itself on a mature supply chain, a skilled workforce, and existing infrastructure primed for EV production.

This unique positioning makes Thailand an attractive destination for EV manufacturers in the region. As the EV market grows, Thailand’s robust automotive industry is set to play a pivotal role in this transformative phase. The Board of Investment of Thailand (BOI) revealed that 16 investment privileges have been approved to battery electric vehicles manufacturers, with a collective investment exceeding 39.5 billion baht.

Revised from the previous EV 3.0 scheme, the newly introduced EV 3.5 scheme aims to maintain the momentum of Thailand’s EV industry. Key updates include changes to the purchase subsidy scheme and reductions in excise tax and import duties:

• Subsidies Based on Vehicle Types and Battery Capacities: Diverse subsidies will be offered for the purchase of electric cars, electric pickup trucks, and electric motorcycles, determined by the vehicle types and battery capacities.

• Excise Tax Reduction: Electrical passenger cars priced not exceeding $200,000 USD will benefit from a reduced excise tax, decreasing from 8% to 2%.

• Import Duty Reduction: Importing EVs as Completely Built-Up Units (CBUs) during the initial two years (2024-2025) will enjoy a reduction in import duties of up to 40%.

Anticipation for heightened market competition is evident. The previous year witnessed the establishment of production facilities by several new Chinese EV companies, including Neta and BYD. Neta has initiated mass production of its Neta V-II electric SUV in Bangkok, with an annual production target of 20,000 vehicles.

BYD, having laid the foundation for an EV factory in Rayong and slated to start production in 2024, expects an annual capacity of 150,000 vehicles. Rever Automotive, BYD’s sole distributor in Thailand, plans to triple its dealerships in the country within two years and expand its commercial vehicle offerings.

While the market is currently dominated by Chinese and Japanese manufacturers, the Thai government aims to attract more EV manufacturers, particularly from the US, Europe, and South Korea. This aspiration aligns with Thailand’s 30@30 goal, which seeks to transition 30% of the country’s auto production to EVs by 2030.