Researchers laud Thailand's potential in becoming regional EV hub
Though Thailand came in ninth among 15 countries in terms of readiness to adopt electric vehicles, it still has a very good potential to become an EV manufacturing hub soon.
Thailand’s potential was unveiled on Tuesday at the release of Arthur D Little (ADL)’s report “Unleashing Thailand’s Electric Mobility Potential”.
This report comes after the 15 countries were ranked in ADL’s annual Global Electric Mobility Readiness Index (GEMRIX 2022).
Andreas Schlosser, ADL partner and global head of the automotive, told the press that electric vehicles were fast becoming popular with overall usage rising over the past two years.
“Thailand is also well prepared for EVs in terms of market, users, infrastructure, and government,” he said.
However, he pointed out, that though the Thai EV market is growing thanks to government policies and moves to attract investment, there are still many challenges it must address to maintain competitiveness.
Hirotaka Uchida, principal and head of ADL Thailand, said the development of an EV industry is critical for Thailand to maintain its position as the “Automotive Hub of Asia”, and to do that, the government needs to build a stronger EV charging infrastructure and encourage more start-ups to join the EV ecosystem.
He said Thailand lags behind Indonesia in terms of lithium battery production and cannot compete with Vietnam when it comes to funding.
However, he said, Thailand can benefit from its strong foreign allies like China and Japan, which will help the Thai EV industry grow exponentially.
Besides, Thailand’s experience as an internal combustion engine manufacturer has also helped with its transition to becoming an EV engine producer.
“What you need to focus on now is strengthening what you are good at and speeding up the improvement of your EV charging stations and infrastructure to support a wide adoption of EVs among Thai consumers,” Uchida said.
In the report, ADL identified five key challenges in Thailand’s transition to electric mobility. They are:
- Shifting to mixed energy and relevant supplier base
- Competitiveness in the supply of batteries
- Building a charging infrastructure
- Building awareness of carbon neutrality
- Potential in the export market
Akshay Prasad, senior engagement manager of ADL SEA, said for Thailand to evolve into an EV ecosystem, all players will have to collaborate across the value chain.
Local players should also establish a Thai EV brand, which will serve as a game changer for the future of Thailand’s auto industry, he said.
“To become a regional EV export hub, Thailand needs to have its own national brand and then it should explore new potential markets like Pakistan, Bangladesh and the Middle East,” Prasad said.
He also advised Thailand to look into battery recycling and continue developing alternative options. He said that though the country lacks nickel, it does have zinc, which is a useful ingredient in making batteries.
Schlosser backed Prasad’s idea on battery recycling, saying this would ensure that EV batteries do not end up polluting the environment after three to five years of use.
According to the study, the sale of EVs in Thailand should surge by more than 500 times from 1,572 units in 2020 to about 831,161 units by 2030.
By 2030, the report said, Thailand should have 61,000 electric cars and pick-trucks, 763,000 motorcycles and 7,000 buses and trucks.
However, the three ADL representatives said that though these figures are impressive, they are still not sufficient for the country to become an Asean EV hub.
But once Thailand addressed its weaknesses and strengthened its abilities, it can start playing an important role in the global EV ecosystem and be at the forefront regionally.
Meanwhile, Norway took the top spot in this year’s GEMRIX index, followed by China, Germany, Singapore, and the United Kingdom in that order. Thailand held the 9th spot after the United States, Japan, and the United Arab Emirates, while Mexico, India, Brazil, Indonesia, Vietnam and South Africa held up the rear.
The countries were divided into four groups, namely global benchmark, ambitious followers, emerging EV markets and starters.