Asia’s Detroit, Thailand aims for battery makers to stay ahead in EV race


The country has attracted 75 billion baht ($2.2 billion) in funding from the electric vehicle industry, including Chinese investment firms such as BYD Corp, Great Wall Motor Co and SAIC Motor, Changan Automobile Co and GAC Aian New Energy Vehicle Co. ..The investment plan will be finalized soon, and Chery Automobile Company is also negotiating.

Companies investing at least 5 billion baht in electric vehicle manufacturing are exempt from the 20 percent corporate tax for three to eight years. Additional incentives for the production of key EV components could lead to a 50% tax discount over the next five years.

While exports account for the lion’s share of Thailand’s auto production (WTO figures estimate car exports to be worth $22 billion a year), the government is also keen to encourage the domestic electric vehicle market, offering subsidies of up to 150,000 baht to help drivers switch from gasoline-powered cars to .

The next step is to lure battery makers amid fierce competition from the U.S. and Europe, which have rolled out programs such as the Biden administration’s inflation-cutting bill to build a domestic battery industry.

To this end, a multi-billion baht subsidy package is being developed and will be submitted to the new government for approval, said Narit Therdsteerasukdi, secretary-general of the Board of Investment of Thailand. The committee oversees foreign investment in Thailand.

Thailand has set a goal of making 30 percent of its car production clean by 2030, a strategy known as 30@30. This would require domestic production of 40 GWh of batteries per year, enough to power 725,000 cars.

“I believe electric vehicles will be at the top of the new government’s agenda. Our goal is to remain the champion in Southeast Asia and be among the top 10 in the global electric vehicle industry,” Narit said in an interview earlier this month.

The following is an edited transcript of the interview for brevity and clarity.

What makes Thailand an attractive place for electric vehicles?

We are located in the center of the region, close to big markets like China and India. Investors can use Thailand as a production and export base because we have connections with neighboring countries.

We have a very strong automotive industry supply chain with more than 2,000 component suppliers. Thailand has good relations with every country – many call us a conflict-free zone. During the COVID-19 pandemic, we proved that we can offer resilience to investors: there were no lockdowns affecting the industrial sector.

In terms of investment attraction in the past eight years, the automobile industry ranked second, and the electronics industry ranked first, which shows the importance of the automobile industry to Thailand’s economy.

What are Thailand’s ambitions when it comes to securing investment in EV makers and supply chains?

Earlier this year, we launched a new investment promotion strategy. Our goal is to maintain the Southeast Asian champion and rank among the top ten in the global electric vehicle industry.

Thailand is the first country in Southeast Asia to announce aggressive comprehensive measures covering both the supply and demand sides.

We provide incentives not only to EV producers, but to the entire EV ecosystem. Promote batteries, key components, charging and swapping station components, software applications, etc.

We promote all areas of the industry, including pure electric vehicles, hybrid vehicles, hybrid vehicles and fuel cell electric vehicles, as well as various types of two-wheel, three-wheel, four-wheel vehicles, motorcycles and electric bicycles.

Are you going to change some incentives?

Since the market has been developed for quite some time, we don’t need to give top subsidies like we used to. So we will reduce subsidies and increase conditions, such as battery specifications, because the technology will also develop.

The subsidy per vehicle will be reduced from 150,000 baht to 100,000 baht. The minimum threshold for battery capacity will also be raised from 30 kWh to 50 kWh.

The aim of the measure is to make electric cars cheaper, or comparable to those with internal combustion engines.

Demand-side stimulus is important to investors’ decision to invest in Thailand, as it will help create a huge EV market in the country.

Do you think you can convince BYD and CATL to take advantage of these battery subsidies?

They are the target of our battery subsidy program. According to our goal of 30@30, we need at least 40 GWh of batteries.

Why is Thailand so attractive to China?

Countries around the world are facing many challenges and uncertainties, especially geopolitical tensions and decarbonization. Thailand has many advantages to cope with these changes and also meet the needs of future investors. That’s why all the investment focus is turning to Southeast Asia, especially Thailand. That’s why I visited China twice this year.

Chinese investors are very interested in investing in Thailand, especially in the field of electric vehicles and their components.

First published date: Jul 18, 2023 at 14:53 PM UT

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