Thursday, October 17, 2019

Thai auto industry not ready for EV revolution

Oct 06. 2016
Photo From www.greens.org.au
Photo From www.greens.org.au
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By Sasithorn Ongdee

sasithorn@nationgroup.com

13,952 Viewed

Thai authorities have put the cart before the horse when it comes to electric vehicles (EVs). Excited by the huge potential of the new technology, they have neglected the structural economic changes necessary to its realisation here.
The Thailand Development Research Institute recently cautioned against the policy of support “pure” rather than hybrid EVs, saying the country is not yet ready.
The Finance Ministry is set to waive customs tax on imported Evs, for which excise tax could also be cut to 5-10 per cent of the vehicle’s price.
Meanwhile, the Board of Investment on Monday responded to the government policy to promote EVs with a plan to hand EV-related businesses an eight-year tax exemption.
The government aims to stimulate the demand side first before turning its focus to boosting supply.
The EV sector has been hailed as a potential new “S-curve” industry for Thailand, featuring innovation and high technology that help boost the economy and replace traditional sectors that are now flagging.
Following the government’s lead on EV, firms have flocked to jump into a likely “blue ocean” of new market space.
PTT, the largest oil and gas conglomerate, has set a target of 20 charging stations for electric vehicles by next year, adding to the foru already open. Another Thai company representing a group of auto-part producers recently joined hands with a leading EV maker in China to import electric buses. And a high-rise condominium developer will open a charging station at its new condo project by the end of the year.
Besides the private firms, Bangkok Mass Transit Authority plans to introduce 200 EV buses into its fleet as a pilot project.
Electric cars tower over their petrol and diesel counterparts when it comes to eco-friendliness, efficiency and savings on oil imports.
More importantly, recent technological advances have made them affordable and convenient to use, with batteries that last 300-400 kilometres per charge.
Recently, the market was stunned by Volkswagen’s launch of an EV concept called “ID” that will produce a car capable of running 600km on one charge and costing around US$30,000.
This follows news that US electric-car-maker Tesla has orders for more than 400,000 vehicles at $35,000 each.
The industry could be a major weapon in the battle against global warming. It could also reduce Thailand’s dependence on fossil fuels, translating into impressive savings.
The government, however, appears to be neglecting the research and development that must be our first priority if EV is to become a pillar of the Thai economy.
One crucial challenge to be addressed is identifying the electric vehicles best suited to Thai users and producers.
The battery is the heart of an electric vehicle, but it would replace more than 200 auto parts that need to be produced for conventional cars. As such we must study the impact of EV production on small-to-medium suppliers in the auto-parts industry. Does the government have a contingency plan in place?
Without such preparations, the government risks missing its target of 1.2 million EVs on the road by 2036, or else the target could be met but the economic returns could be meagre.

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