What’s Tesla Doing in Thailand? – CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

---

Reports this week are that Tesla is looking to build a production facility in Thailand. The American company is said to be talking to the government of Thailand about the potential factory. Tesla already conducted a site survey in late 2023.

It’s not clear if this factory would produce cars or batteries, or both. It could be that Tesla is looking to get around anti-China policies and potential policies in the US and Europe with production in Thailand. Or it could just be that Tesla sees more demand in the region and sees Thailand as a good place to lay down roots and work on satisfying that demand. The Thai government says it has offered Tesla 100% green energy for the factory, and surely various other incentives.

Elon Musk has said many times that Tesla would need many more gigafactories in order to meet its long-term vehicle production and sales targets. It’s not smart to have too many of your eggs in one basket, or too much production capacity dependent on one government, so it’s always been expected that Tesla would build gigafactories in more countries. Thailand just seems like one of the next logical places to expand operations and production.

“Thailand is Southeast Asia’s largest car producer and exporter, and aspires to become the region’s main EV production hub,” Reuters writes. “The country has already drawn over $1.44 billion in investment commitments from Chinese EV producers.”

One thing that throws a crimp in all of this is that Tesla’s sales growth has slowed quite a bit in the past year and is likely to get slower still in 2024, maybe much slower. So, it seems Tesla isn’t really in need of much production capacity expansion at the moment. However, the company is developing a smaller, lower-cost car that is supposed to give Tesla its next big sales boost once it comes to market and production ramps up. Once that’s the case, Tesla will presumably want to produce this cheaper car in large volumes in various markets where it will be sold in high volumes. Southeast Asia definitely looks like a place where Tesla could target sales of a more affordable, smaller electric car, and “made in Thailand” probably sits better with many buyers than “made in China” in some of those countries.

In any case, it’s all speculation for now. It looks like Tesla will create a factory and produce something in Thailand, but it’s not clear how long that will take, what volumes are targeted, or even if this is a serious likelihood or consideration. Recall that Tesla has considered building a factory in India for several years. We’ll have to wait for more information on this as it develops.

One thing we do know is that BYD is already in or entering various markets in Southeast Asia, in other parts of Asia, in Africa, in South America, and in Central America. The BYD Dolphin became a quick hit in Thailand last year. In theory, Tesla should be competing in this and all other markets where BYD is growing — once it has its more affordable, smaller electric car on the market.

Any other thoughts on Tesla’s potential foray into Thailand?