The Evolving EV Landscape in Thailand: A Shift Towards Manufacturing with Global Influences
Thailand’s electric vehicle (EV) landscape is at a critical point of transformation. Traditionally reliant on imports for its automotive needs, Thailand is now witnessing a significant shift towards domestic EV manufacturing. This change is driven by substantial investments from global EV companies, particularly from China, and presents a contrasting outlook compared to traditional Japanese automakers in the region. Here, we explore this dynamic shift, the key players involved, and the future of EV manufacturing in Thailand and neighbour, Vietnam. The focus is on reducing imports and building a self-sufficient EV ecosystem.
Chinese EV manufacturers are at the forefront of this transition, capitalizing on Thailand’s favorable policies to set up manufacturing units. At this point, there are 7 of these upcoming plants, with GAC Aion, BYD, GWM in Rayong and Foxconn in Chonburi. The rest are yet to be disclosed. Examples are:
GAC Aion (China)
Plant: Rayong Province, Thailand
Capacity: 50,000 vehicles annually
Completion: First phase due by July 2024
BYD (China)
Plant: Rayong Province, Thailand
Capacity: 150,000 passenger cars annually
Start: 2024
Hozon Auto (China)
Plant: Thailand
Capacity: 20,000 vehicles annually
Start: End of January 2024
Players like Foxconn (Taiwan), Great Wall Motor (China), Changan (China), and Neta (China) are also investing heavily, further solidifying China’s influence in Thailand’s EV sector. Thailand leads Southeast Asia in battery electric vehicle (BEV) sales, holding about 75% share of a market that consisted of 14,777 new registrations in Q1 2023 and a projected total number of 68,000 units in 2023. By 2030, Thailand aims to to have EVs account for 30% of its annual production of 2.5 million vehicles. The first quarter of 2023 saw a 77% year-on-year investment increase in the EV industry, reaching 185.73 billion baht. This surge is linked to the applications of 397 manufacturers for investment promotion with the Board of Investment (BOI), with a substantial portion directed towards battery EVs, hybrid EVs, and plug-in hybrid EVs. The entry of Chinese EV brands such as MG Motor, Great Wall Motor, and BYD has intensified competition, challenging the dominance of Japanese automakers. Siam Motors, traditionally aligned with Japanese automakers, reflects this shift as it explores partnerships with Chinese companies for high-end EVs. Even though Tesla has not decided on a local factory, their sales in Thailand for the year 2023 show a strong market response: Since Tesla opened up reservations for the Model Y and Model 3 in Thailand on December 7, more than 5,000 units have been ordered. This results in rank 4 for Tesla in 2023.
In contrast, Japanese automakers, historically dominant in Thailand’s automotive industry, have been more cautious in their approach to EVs. Companies like Toyota and Honda are gradually entering the EV market but are yet to announce large-scale EV manufacturing plans in Thailand. Their strategy seems to focus on hybrid vehicles as a transitional step towards full EVs, reflecting a conservative approach compared to their Chinese counterparts. However, Prime Minister Srettha mentioned that the Thai government recognizes the importance of the Japanese automotive industry in the country and is seeking cooperation in future developments. Toyota said that they were committed to working with the Thai government to make Thailand the leading center for electric vehicle production in the ASEAN region and the production of internal combustion engine (ICE) vehicles, electric cars such as HEV, PHEV, BEV and FCEV to sustain the supply chain and Thailand’s export car industry.
Vietnam is also emerging as a significant player in the EV manufacturing landscape.
VinFast (Vietnam)
Global Expansion: $4 billion plant in North Carolina, USA
Domestic Focus: Emerging as a strong local competitor.
BYD (China)
Plant: Vietnam (car parts manufacturing)
Details: Capacity not disclosed.
Hon Hai Precision Industry Company (Foxconn) (Taiwan)
Investment: $244 million in Quảng Ninh Province, Vietnam
Product: EV components.
Whether Thailand can maintain its early lead in the long-term race remains to be seen. Thailand’s neighbor, Vietnam, is also emerging in the EV manufacturing arena, although its EV market is still in a developing stage compared to Thailand’s. VinFast is expanding globally with a $4 billion plant in the USA, while BYD and Foxconn are investing in Vietnam’s EV component manufacturing. A common challenge for both Thailand and Vietnam is their lack of strategic access to their own battery materials, unlike the resource-rich Indonesia.
