Can Thailand Lead ASEAN in EV Adoption? – CleanTechnica

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The “Detroit of the ASEAN” is now ahead of the EV race and is creating a wave of catch-uppers

As I was reading the white paper (yes, printed on paper) “Thailand’s EV Powerhouse: Leading the Charge in EV Revolution in a Challenging SEA Automotive Market,” the simple conclusion was, if we take into consideration supportive government policies, growing charging infrastructure, and increasing consumer demand for sustainable transportation options, of course Thailand will emerge as the EV leader in the Association of Southeast Asian Nations (ASEAN).

As the “Detroit of Asia” (a moniker that used to belong to the Philippines before 1986), Thailand is the most comprehensive automotive supply chain in the region. It supplies cars to both the left- and right-hand drive markets in ASEAN, and is also a hub for motorcycle manufacturing, though not a large as that of Thailand and Vietnam.

The white paper published by YCP in December 2024 offers a detailed analysis of Thailand’s EV landscape, examining the overall automotive market, the growth of electric vehicles, the development of charging infrastructure, government regulations and incentives, challenges and opportunities, and the future of mobility with Vehicle-to-Everything (V2X) technology. To make sense of the 38-page report, I broke it down to the main topics and added a couple of snippets of information.

The year 2024 has witnessed significant contractions in the overall automotive market across ASEAN countries, including Thailand, Indonesia, and Vietnam. Thailand, in particular, experienced the steepest decline, with sales falling by 24.2% in Q2 2024 compared to Q2 2023. This decline can be attributed to a combination of economic factors, such as inflation, rising interest rates, and weakened consumer spending power. However, amidst these challenges, Thailand’s EV market has demonstrated resilience and continued growth, buoyed by targeted government policies and ongoing infrastructure development.

The Rise of Electric Vehicles in Thailand

The report provides a granular analysis of the different types of electric vehicles gaining traction in Thailand, including four-wheelers, two-wheelers, three-wheelers, and commercial vehicles. The battery electric vehicle (BEV) market in Thailand is projected to achieve 5% year-over-year growth in 2024, capturing approximately 13% of new car sales. Notably, Chinese brands like BYD, Neta, and MG have established a strong foothold in Thailand’s BEV market, collectively holding a dominant 65% market share in 2024.    

This growth is further fueled by the increasing presence of EV manufacturing plants in Thailand. Chinese automakers are facing tariff issues across ASEAN and globally–except in the Philippines where tariffs are relieved until 2028. In Europe, for example, China-assembled cars are taxed from 15% up to 38%. There is no single free-trade agreement between the EU and the ASEAN, but special agreements have been made country to country, such as the case of Singapore and Vietnam.

Nevertheless, several Chinese automakers (and one Vietnamese automaker) have established or are planning to set up local production facilities in Thailand because tariffs are reduced from 0% to 5% for vehicles assembled with local content (some countries requiring up to 50%). These brands include:

• AION: Invested THB 2.3 billion in a new factory, aiming to produce 20,000 vehicles each year.  
• BYD: Opened its first factory outside China in Rayong with a capacity of 150,000 vehicles annually. Launched only last July 4, 2024, the $486 million plant is located in the WHA Industrial Estate.
• Changan: Plans to establish its first BEV plant in Thailand with an annual capacity of 100,000 units.
• Chery: Announced plans to establish a factory with a target to produce 50,000 vehicles in 2025, expanding to 80,000 units by 2028. It already has a factory in the north of the Philippines, in Clark, a former US airbase where it assembled trucks and SUVs and could potentially be an EV assembler too.
• Great Wall Motor: Converted a former General Motors production plant to produce 80,000 hybrid and electric vehicles per year.  
• Neta: Partnered with Bangchan General Assembly Co., Ltd. to produce affordable electric vehicles.  
• VinFast: While not mentioned in the report, VinFast, a Vietnamese automaker, has also expressed interest in establishing a manufacturing presence in Thailand. In March of last year, VinFast targeted to open 15 initial dealers and 22 showrooms Bangkok area. Though formal agreements were signed, no timeframe was given.

The influx of these manufacturing plants is expected to further boost EV production and sales in Thailand, contributing to the country’s ambition of becoming a regional EV hub.

Will Tesla Locate in Thailand?

A Straits Times report, published in November last year, noted that Tesla executives have explored the possibility of establishing a manufacturing presence in Thailand. That all changed in January this year when the company changed it regional plans.

Tesla is facing strong competition from Chinese made EVs distributed in the region, and is currently concentrating its factory production in established locations in the United States, China, and Germany.

Instead of a factory, it has now prioritized the expansion of its charging station infrastructure in Thailand, effectively pausing its factory construction plans. This change is attributed to a combination of factors, including Tesla’s reassessment of its global expansion strategy, the impact of business losses, and the intensifying competition from Chinese EV manufacturers.

It’s important to note that this strategic shift appears to be a broader trend across Southeast Asia, with similar reports indicating a pause in Tesla’s factory plans in other countries like Malaysia and Indonesia.

Expanding the EV Charging Infrastructure

Thailand’s EV charging infrastructure is undergoing rapid expansion to support the growing EV adoption. Between December 2023 and June 2024, the country’s charging network outlets increased by 12%, with DC chargers leading the growth.

The report observes a strong market preference for DC chargers due to their rapid charging capabilities. However, the current charging infrastructure remains concentrated in urban areas, presenting challenges for inter-provincial travel and highlighting the need for broader geographical coverage.

Companies like Yusen Logistics, Nippon Express Logistics (Thailand), and FedEx are actively deploying EV trucks in their operations, marking a significant shift towards sustainable practices. Yusen Logistics, for instance, has invested in a fleet of EV trucks and established solar-powered charging infrastructure at its Chonburi warehouse, with plans for further expansion. Nippon Express Logistics (Thailand) has introduced its first EV truck for air cargo delivery at its Bangkok Logistics Center, demonstrating a commitment to reducing its environmental impact. FedEx is also expanding its EV fleet for last-mile delivery in high-traffic areas of Bangkok and Pathum Thani.

Startup companies like Thai EV are facilitating this transition by providing EV solutions and fleet management platforms tailored to the logistics industry. This movement reflects a growing awareness of environmental concerns, alignment with corporate sustainability goals, and support from government initiatives promoting EV adoption. As charging infrastructure develops and EV technology advances, the logistics sector in Thailand is poised for further electrification.

Government Initiatives, ADB support and e-Buses

The Thai government is playing a proactive role in fostering EV adoption and local production through a range of regulations and incentives. The EV 3.5 program, with a budget allocation of THB 7.12 billion, is a key initiative aimed at stimulating local EV production. Additionally, the government has implemented excise tax reductions for HEVs from 2028 to 2032 and approved a 150% tax deduction for electric bus and truck purchases until 2025.

The Bangkok Mass Transit Authority (BMTA) is a key player in the EV transformation. By actively integrating electric buses into its fleet as a key component of its modernization efforts, it also increased awareness and acceptance of electric vehicles. This initiative, fueled by 150% tax deductions which end this year, was supported by significant financial backing from organizations like the Asian Development Bank (ADB), and is designed to replace aging diesel-powered buses with cleaner, electric alternatives, directly addressing the severe air quality challenges faced by urban centers like Bangkok.

ADB reports detail their involvement in providing loans and financial assistance to facilitate the procurement of large fleets of these electric buses, working with companies such as Energy Absolute PCL. The environmental benefits are substantial, promising a significant reduction in greenhouse gas emissions and a tangible improvement in urban air quality, particularly in mitigating the harmful effects of PM2.5 dust, a persistent problem in the city.

Though many electric buses are sourced from China, being manufactured within Thailand contributes to the growth of the country’s domestic EV industry and boosting economic output.

The Road Ahead: V2X Technology and the Future of Mobility

The report concludes with insights into the future of mobility with Vehicle-to-Everything (V2X) technology. V2X technology enables vehicles to communicate with their surroundings, including infrastructure, pedestrians, other vehicles, and the electrical grid, enhancing safety, efficiency, and the overall driving experience. While Thailand’s adoption of V2X technology is still nascent, the report highlights the potential benefits and opportunities for its future implementation.