Competition fierce as Thailand sets out to be EV hub

An impressive 397 manufacturers applied for investment promotion with the BOI in the first three months of 2023, a nine percent increase year on year, BOI secretary-general Narit Therdsteerasukdi said.

The BOI estimates that EV investment throughout the year will reach 600 billion baht.

Narit said 86.8 billion baht of investment went into the manufacturing of battery EVs, hybrid EVs, and plugin hybrid EVs, while the rest went to the manufacturing of batteries, parts, and installation of charging stations.

He said battery EVs generated the biggest investments from 14 manufacturers, with a combined capacity of 270,000 vehicles. Eleven of these manufacturers have already started producing and selling vehicles in Thailand, among them MG, Great Wall Motor, BYD, NETA and Foxconn, he added.

Kriengsak Wongpromrat, president of the Thailand Automotive Institute (TAI), was less upbeat, pointing out that despite the growing investment, Thailand still has to compete against Indonesia and Vietnam if it is to become the region’s hub for EV manufacturing.

He said Indonesia has the advantage of having the world’s largest nickel deposit with 22% of global capacity. Nickel is one of the materials used in EV battery manufacturing.

Vietnam, meanwhile, has signed free trade agreements with several countries and has cheaper labour costs than Thailand. The country also has its own brand of EV known as “VinFast”.

“To become the region’s hub, Thailand needs to continue improving its strengths, which are supply chains, high-quality productivity and skilled personnel,” he said. “Government support is already strong in terms of attracting foreign investment attraction and building infrastructure for EVs.”

The TIA reported that in the first four months of 2023, 19,347 new EVs were registered in Thailand, an increase of 1,036% from the same period last year, reflecting the continued rise in EV adoption among Thai customers.

Manufacturing of EV bikes growing too

Not only is Thailand seeing more investment in electric cars, but the country is also welcoming an increasing number of manufacturers of electric motorcycles from China.

Rachanee Mahatdetkul, managing director of Prospect Development Ltd, developer of the Bangkok Free Trade Zone (BFTZ) project in Samut Prakan province, said that Chinese manufacturers are now responsible for 18% of customers in the BFTZ and continue to rise, edging out Japanese customers who are now dropping from 25 to 20%.

She added that Thai companies take up 25% of areas in the 1-million-square-metre BFTZ, which caters to such industries as EV manufacturing and related businesses.

“With EV bikes gaining popularity in Thailand, we expect to see more Chinese companies establishing their factories here in the near future,” she said, adding that Prospect Development plans to expand the free trade zone project to other provinces such as Ayutthaya and Chonburi, with a combined space for EV manufacturing of 2 million square metres.