Thailand Welcomes EV Producers with Investment Incentives, Tax Breaks
In Thailand, automakers are gearing up for electric vehicle production after the Thailand Board of Investment approved 24 new electric vehicle projects last December. The government is also proposing comprehensive investment incentives to attract manufacturers to the country to produce hybrid-electric vehicles, plug-in hybrid electric vehicles and battery-electric vehicles.
In March 2022, Thailand set a goal of having one million EVs on the country's roads by 2025, with target of 15 million EVs within 10 years. The market is expected to include commercial delivery vans, buses, and trucks in addition to private cars.
By the end of the year, a fully-electric Mercedes-EQS will roll off a production line in Bangkok, marking another milestone in Thailand's journey from conventional automaking hub to regional frontrunner in electric vehicle production, according to an article published by the Board of Investment.
THIS SHOWS HOW IMPORTANT THAILAND IS TO US. THE EQS IS THE ABSOLUTE HIGHLIGHT OF OUR FULL BATTERY VEHICLES – THE TOPMOST AS FAR AS TECHNOLOGY IS CONCERNED. IN THAILAND, WE HAVE PARTNERS WE KNOW CAN DELIVER.
Roland Folger
President & CEO, Mercedes-Benz Thai Division
The German luxury carmaker chose Thailand as its first location in Southeast Asia to manufacture the electric Mercedes-EQS, but also selected Thailand as one of only seven locations in the world to produce the high-performance lithium-ion batteries that can power the vehicle for more than 700 kilometers on a single charge, the Board said.
In addition, BMW has been approved to produce plug-in hybrid electric vehicles, while partnering with Draxlmaier Group, a global automotive supplier based in Germany, for the production of high-voltage batteries and battery modules.
Those 24 approved projects include Mitsubishi Motors' 5.48 billion baht (approx. US$160 million) investment to increase the company’s production of EVs in 2023.
Plans call for Mitsubishi’s auto production line at Laem Chabang Industrial Estate in eastern Thailand's Chon Buri province to produce 39,000 EVs next year - 9,500 battery-electric and 29,500 hybrid-electric vehicles.
Sammitr Group, a Chinese company manufacturing motor vehicle parts and accessories, is set to go for the production of 30,000 battery-electric vehicles with a 5.5 billion baht (US$159.75 million) investment - another project approved by the government.
Both of those approved projects are aiming their sales efforts on the Thai market as well as exports to other Southeast Asian countries.
A new Japanese EV brand called FOMM, which stands for "First One Mile Mobility," has also been approved to start making compact battery-electric vehicles at a plant in Chon Buri province plant.
Nissan Motors has gotten a green light from the Thai government to start producing battery-electric vehicles after making investments in hybrid car production there recently.
Foxconn, a Taiwanese multinational electronics manufacturer, has partnered with Thailand's state-owned oil and gas giant, PTT, one of the world's largest energy companies, to form a joint venture enterprise, Horizon Plus, that plans to invest between US$1 and $2 billion to build finished cars for other manufacturers using a modular platform and software developed by Foxconn.
With production due to start in 2024, the partners plan by 2030 to be manufacturing between 150,000 and 200,000 vehicles annually in Thailand's high-tech Eastern Economic Corridor.
Thai Renewable Energy Company Charges Ahead
Thai billionaire and former securities trader Somphote Ahunai started renewable energy outfit Energy Absolute in 2006. He took the Bangkok company public in 2013. Now, Energy Absolute has expanded into energy storage with a $3 billion battery gigafactory project to make lithium-ion batteries that opened in December 2021.
Its subsidiary, Energy Mahanakorn, has built 1,855 charging stations for electric vehicles across the country, ensuring that Thai drivers can access power when and where they need it.
The company set up another subsidiary, Mine Mobility Research, in 2017 to develop electric cars for the Thai market.
Mine Mobility demonstrated three prototype vehicles at the Bangkok International Motor Show 2018 - a City EV Concept, a Sport EV Concept, and MPV EV Concept. All three vehicles can be 80 percent powered in 20 minutes using a DC Quick Charger.
At the 2019 Bangkok Motor Show, Mine Mobility unveiled its first passenger electric car - a five-seat hatchback with a range of around 200 kilometres (124 miles). Although this is less than Tesla’s Model 3 or BYD’s e6, it is still a range that convinced a group of five taxi unions to order 3,500 cars to serve as Bangkok taxis.
With a goal of "Mission No Emission," Mine Mobility aims to offer environmentally friendly, safe, and high quality transportation to Thai residents. That is especially critical in large cities like Bangkok, which has more than eight million residents and is home to 13 percent of the country’s population.
The Asian Development Bank and Energy Absolute have signed a 160 million baht loan agreement to finance an electric ferry fleet for Bangkok, the first such transport system in Southeast Asia, the ADB announced in a press release on April 26, 2022.
The emergence of Thailand, the world's 10th biggest auto manufacturer in 2021, as an EV hub has been fast-tracked by favorable government policies that incentivize both investors in the EV sector's supply chain and car buyers.
The Board of Investment offers three to 11 years of tax holidays for EV production of all types. The Board also grants investment incentives for EV-related infrastructure, especially charging stations, to accelerate the growth of the domestic market for electric vehicles.
Investors are noticing. Board data shows that during the first quarter of 2022, investment pledges in the automotive and parts sector more than quadrupled from a year earlier to the equivalent of US$1.2 billion.