Plugging into the future with EV mobility
Although hybrid electric vehicles (HEVs) have been available since 2009, Thailand is still in the early stages of transitioning to electric vehicles.
That should soon change, however, with the adoption of zero-emission vehicles (ZEVs) predicted to surge from 2025 due to the government's regulations, incentives, electrification goals, better technology and rising consumer demand.
The government is determined to improve air quality, develop smart cities nationwide, and meet its target of reaching carbon neutrality by 2050, and net zero greenhouse gas emissions by or before 2065. As transportation is a major source of carbon emissions, electric vehicles are one solution to reducing the air pollution and greenhouse gas emissions caused by internal combustion engine vehicles (ICEV).
The aim to switch to EVs was underscored in 2015 when the Cabinet approved the next-generation automotive industry as one of the New Engines of Growth in the 20-year national strategic plan. The government's policy to support EV production, R&D and domestic usage motivated individuals, academia and the private sector in Thailand to establish the Electric Vehicle Association of Thailand (EVAT) in September that same year.
In February 2020, Prime Minister Prayut Chan-o-cha appointed the National Electric Vehicle Policy Committee to set a direction and target for the EV shift towards zero-emission mobility. Under the government's 30:30 electrification policy, all vehicles used by government agencies and public fleets as well as 30 per cent of all new vehicles produced in Thailand must be ZEVs.
In response to the government policy, the EV committee last year formulated a bold roadmap for EV adoption with a target for ZEV production of 725,000 EV cars and pick-ups plus 675,000 EV motorcycles, and 34,000 buses and trucks.
This will account for 30 per cent of all auto production in 2030. The target for ZEV use, meanwhile, is 440,000 passenger cars and pickup trucks, 650,000 motorcycles, and 33,000 buses and trucks.
In addition, the government will also boost related infrastructure with a target of 12,000 fast chargers and 1,450 battery swapping stations to be available throughout the country by 2030.
Moreover, Thailand is competing with Indonesia to become an EV production and export hub. According to a report by the International Renewable Energy Agency, by 2025, around 20 per cent of all vehicles on the road in Asean will be EVs.
There is room for more growth since the Southeast Asian region has a population of around 661 million.
The National Electric Vehicle Policy Committee has set the target of xEV production (HEV, PHEV, BEV and FCEV) at 1.05 million units in 2025, 6.22 million in 2030, and 18.4 million in 2035. EV use is targeted to be 1.50 million in 2025, 5.41 million in 2030 and15.58 million in 2035.
On the global level, technological research and consulting firm Gartner forecasts that 6 million electric cars (battery electric and plug-in hybrid) will be shipped in 2022, up from 4 million in 2021 or 34.4 per cent. This is borne out by the IEA's Global Electric Vehicle Outlook 2021, which reported that the global EV stock across all transport modes (excluding two/three-wheelers) will expand from over 11 million in 2020 to almost 145 million vehicles by 2030, an annual average growth rate of nearly 30 per cent.
In this scenario, EVs will account for about 7 per cent of the road vehicle fleet by 2030. EV sales reach will almost 15 million in 2025 and over 25 million vehicles in 2030, representing respectively 10 per cent and 15 per cent of all road vehicle sales.
Factors driving EV growth
Thailand’s EV demand started to gain momentum when Chinese car makers entered the Thai market with low prices. Great Wall Motor (GWM), a global SUV and pick-up truck manufacturer, is a key player shaking up the Thai EV market after launching a 100-per-cent electric vehicle, the ORA Good Cat, in October last year at a competitive price, creating an electric vehicle phenomenon in the country.
Last year, the number of newly registered xEV passenger cars (no more than 7 seats) nationwide categorised by fuel type was 44,323 units, of which 1,943 were BEV (battery electric vehicle) units, according to the Land Transport Department.
The accumulated number of BEV registrations surged from 1,394 units in 2017 to 11,382 in 2021 (data from the Electric Vehicle Association of Thailand).
Elliot Zhang, president of Great Wall Motor’s ASEAN operations, earlier anticipated that the total sales of BEV cars in Thailand this year would surge to 18,800 units. In 2022, GWM expects to leapfrog its competitors to grab a share of the EV market pie with sales growth of 440 per cent to 20,000 units for all EV types.
A package of incentives covering the period 2022-2025 approved by the Cabinet in February 2022 is critical to the EV shift and an increase in domestic production.
In the first two years, the measures will focus on encouraging widespread domestic use of EVs by providing tax breaks and subsidies for imported models and those made locally. The purchase of an EV made by a participating brand will see the buyer receive a subsidy of Bt70,000 to Bt150,000, depending on the type and model of the vehicle.
In the last years of the package, the support will mainly be on promoting domestically produced EVs, while cancelling some benefits for imported models. This is to encourage operators to accelerate the production of electric vehicles in the country to meet growing demand.
In addition to the rising price of petrol, the recent incentive package and a greater EV variety also encouraged consumer interest and boosted EV orders at the 43rd Bangkok International Motor Show 2022, which ended on April 3. The event saw a 14.4 per cent growth in orders from a year earlier to 31,896, more than 10 per cent of them electric cars. At the show, GMW enjoyed a total of 1,520 orders for its three EV models, with the ORA Good Cat accounting for 1,136.
MG Sales (Thailand), authorised manufacturer and distributor of MG cars in Thailand, recently reported that MG received bookings for 4,500 units in just one month after joining the government’s EV stimulus policy in March.
Jaturon Komolmit, chief of operations of Grand Prix International (GPI), which organised the show at IMPACT Muang Thong Thani, said it was a positive sign to see so many carmakers now manufacturing EVs, with more than 20 different electric models presented at this year’s event.
In addition to diverse models to meet customers' needs, improved batteries, more readily available charging infrastructure and price parity with internal combustion engine (ICE) vehicles are major drivers. The National EV Policy Committee expects that EV prices will be equivalent to ICE prices in 2025.
Acceleration in charging infrastructure ecosystem needed
Another factor crucial to boosting demand for EVs is the availability of charging infrastructure within convenient proximity and driving range. In line with the road to net zero, the Energy Ministry launched a promotional campaign in 2017 offering a subsidy for state agencies and private firms to install EV charging points.
BMW Group (Thailand) could be the pioneer in developing a public EV charging station. In addition to supporting the EV charger projects of state electricity agencies, BMW formed a partnership with Polytechnology, Greenlots Central Group, and AP (Thailand) to introduce ChargeNow as Thailand's first public charging station for any xEV car brand. BMW has been collaborating with its partners in expanding the ChargeNow network from the current 600 outlets nationwide.
Energy Absolute (EA) is one of the leading service providers and has installed more than 430 stations and 1,800 chargers to facilitate AC Charge, Fast Charge and DC Ultra-Fast Charge services. EA also entered into a partnership agreement with Metropolitan Electricity Authority (MEA) and JRW Utility Plc in March to carry out a feasibility study on an EV Smart Charging Station project.
Sharge Management Co, a fast-growing EV charging startup, recently announced its strategic business plan for 2022 that will see it strengthening the charging ecosystem to enable customers to accelerate charger expansion. Sharge provides integrated charging solutions for Night (charge at home), Day (charge at destination) and On-the-Go (charge between destinations). This year, Sharge aims to add 600 Night stations with 2,000-4,000 chargers, allowing residents at single houses and condominiums greater convenience.
In addition, Sharge recently entered into partnership with Chao Phraya Express Boat Co to provide at least 40 chargers for electric boats in the next five years.
“Besides cheaper car prices, charging infrastructure is a crucial factor to boost the EV market. I believe that from 2025, the number of EV charging stations will increase significantly with 100,000-200,000 chargers installed in 2030 nationwide," said Peerapatr Sirichantaropart, managing director of Sharge Management Co.
Evolt Technology, a Thai tech startup providing charger supply, platform and software management, partnered with Banpu NEXT in February to expand access and improve the efficiency of integrated charging station platforms with digital technology and user-friendly applications.
Evolt Technology's CEO Poonpat Loharjun said that the two firms laid down a framework for expanding consumer access to charging platforms and are aiming to provide 500 Fast Charge stations in 2022, 5,000 stations throughout Thailand by 2025, and to provide electric vehicles under the Mobility as a Service (MaaS) concept of Banpu Next.
At present, there are about 10 EV charging providers in Thailand. According to the EV roadmap, the National EV Policy Committee has set a target to have 12,000 DC quick chargers in 2030 and 36,500 in 2035.
A fresh boost for charging infrastructure
In an effort to speed up the adoption of electric mobility, the Thailand Board of Investment (BOI) in April approved revised incentives and conditions for investments in charging stations, allowing smaller charging service providers to get the tax benefits.
Adding to the 5-year corporate income tax exemption available to investments in charging stations with at least 40 chargers, 25 per cent of which are the DC type, the revised measures now allow smaller charging stations to be eligible for 3-year tax benefits.
The revised measures also abolish two requirements, namely the condition barring investors from receiving additional benefits from other agencies, and the requirement for ISO certification. These two conditions are no longer relevant given that some chargers could be installed in other establishments such as hotels and condominiums, not necessarily at typical charging stations. Moreover, in order to ensure rapid expansion of charging facilities, a combination of several support measures may be required.
“We have revised the measures to ensure that our incentives stay relevant in a fast-changing business environment. This will enable investors, particularly SMEs and startups to have more access to BOI benefits, and manage their costs more effectively,” said Duangjai Asawachintachit, secretary-general of the BOI.
Gearing up for investment
A burgeoning EV market creates numerous opportunities for automakers and investors to reap the benefits of investments in Thailand's electrification. In moving Thailand forward to become a production hub of electric vehicles and batteries in 2035, the Board of Investment (BOI) announced a new promotion package in late 2020 covering a comprehensive range of electrical vehicles, with a focus on battery electric vehicles, local production of critical parts, and inclusion of all commercial vehicles (passenger cars, buses, trucks, motorcycles, tricycles) and ships.
The BOI previously approved 26 projects producing electric vehicles of various types, including 5 hybrid electric vehicles (HEVs), 6 plug-in hybrid electric vehicles (PHEVs) and 13 BEVs, and 2 E-Bus projects, with a combined production capacity of over 566,000 units per year, BOI data shows. So far, seven of those projects have started commercial operations, namely majors like Nissan, Honda and Toyota for HEVs; Mercedes Benz and BMW for PHEVs; and newcomers FOMM and Takano for BEVs. The agency also approved 14 projects to make critical parts for EVs, including 10 battery production projects.
Last year, Auto Alliance (Thailand), a joint venture between Ford Motor Company and Mazda Motor Corporation, received approval for a plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV) production project.
FOMM (Asia), a Thai-Japan joint venture, was the first automaker to produce BEVs in Thailand in 2018 with the world’s smallest class 4-seater electric vehicle, followed by Takano Auto with the launch of the country's first EV pickup truck in 2020.
Luxury car manufacturers like Mercedes-Benz and BMW are also enhancing their manufacturing footprints in Thailand and ramping up e-mobility. Mercedes-Benz has announced it will produce the EQS electric vehicle in Thailand later this year, making it the first major automaker to build 100-per-cent electric vehicles in Thailand. The first ever all-electric Mercedes-Benz EQS was developed entirely from an EV platform to become an executive-class electric car.
Mercedes-Benz Thailand together with its local partner Thonburi Automotive Assembly Plant (TAAP), started to build PHEVs in Thailand from early 2016 and opened battery production in 2019.
In line with the parent company’s aim to provide EV for all segments in 2024, BMW Group Thailand is mulling the possibility of assembling electric cars at its manufacturing plant in Rayong. BMW Group Thailand started its assembly plant for PHEV in 2017 and launched a local high-voltage battery production plant in Chon Buri in 2019, enabling it to better respond to growing demand for electrified vehicles in Thailand.
SAIC Motor-CP Co and MG Sales (Thailand), is spending Bt2.5 billion to produce BEV and expand battery production facility in Chon Buri next year to prepare for both domestic demand and export of PHEV and BEV cars.
GWM continues its rapid growth in Thailand and is set to making even bigger strides with the ORA Good Cat gaining in popularity among Thai consumers. GWM plans to begin production of battery BEVs in Thailand in 2023 and open an EV car production facility in 2024.