Thai government announces EV roadmap

The government of Thailand has announced a roadmap to make the country a hub of electrified vehicles in the Association of Southeast Asian Nations (ASEAN) region in five years, reports the Bangkok Post. Under the roadmap, the government plans to promote electric vehicles (EVs) through state agencies and has set a target to produce 250,000 electrified vehicles, 3,000 electric public buses, and 53,000 electric motorcycles by 2025. The government wants to promote Thailand as the centre of a new generation of auto manufacturing, according to Deputy Prime Minister Somkid Jatusripitak. "The Board of Investment [BOI] should revise EV privileges for car and auto parts makers to make production more attractive," said Jatusripitak.

The government held a meeting with the National New Generation Vehicle Committee to promote the country's EV development scheme and discuss ways to promote sales as the market develops. The EV master plan aims to increase EV production to 30% of total annual car production, or about 750,000 units out of 2.5 million units by 2030, according to Thai Industry Minister Suriya Juangroongruangkit. Thailand's industry ministry plans to launch a three-year car and motorcycle trade-in scheme, highlights the report.

Furthermore, the government is working on developing EV charging infrastructure in the country. PTT Plc, a state-owned oil and gas company, and the Electricity Generating Authority of Thailand will help one another in building more charging stations in the country, instead of competing, and the Thai Board of Investment (BOI) will work out promotional privileges for the development, according to Jatusripitak. "Charging stations should be within a radius of 200 kilometres from one another," he said.

Outlook and Implications

The Thai government aims to increase the adoption of electrified vehicles - including hybrids, plug-in hybrids, and battery electric vehicles (BEVs) - and started promoting the alternative-powertrain vehicle industry in 2017 by launching incentives for automakers, component suppliers, and other companies The investment privileges from the government attracted around 20-30 applications, mostly from vehicle manufacturers. The BOI has approved applications from FOMM, Mine Mobility, Mercedes-Benz, SAIC Motor, Skywell, and Toyota for BEV production; from Honda, Mazda, Nissan, and Toyota for hybrid vehicle production; and from Audi, BMW, Mercedes-Benz, Mitsubishi, SAIC Motor, and Toyota for plug-in hybrid vehicle production. OEMs that successfully join the scheme will reap benefits in terms of reduced import tariffs on machinery, raw material privileges, and corporate income-tax exemptions in return for local production of hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), BEVs, and components for these vehicles. Key automakers plan to boost production of EVs in Thailand first in the Association of Southeast Asian Nations (ASEAN) region as the country is the largest vehicle-production base in the bloc. In addition, four investment companies have already opened for electrified-vehicle battery production to help to push electrified vehicles' safety standards, and upgrade product regulations and consumer product-safety requirements to involve the highest standards of testing.

IHS Markit expects demand for EVs in Thailand to grow in the coming years, as the government has announced that it plans to offer tax waivers, discounts, and partial subsidies for electrified vehicle buyers under the new roadmap. The Thai government's earlier scheme focused on the automakers and had fewer incentives on the demand side for potential buyers. We forecast that annual production of electrified vehicles in the country will increase from 35,039 units in 2019 to 570,500 units in 2025 and 934,200 units in 2030.

Posted 16 March 2020 by Jamal Amir, Research Analyst

This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.