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Chinese automakers to start producing EVs in Thailand this year

Chinese automakers to start producing EVs in Thailand this year

March 19, 2024

BANGKOK – The National Economic and Social Development Council (NESDC) has released a report on electric vehicle (EV) investment in Thailand, highlighting the robust investment promotion in 2024 following the EV 3.0 measures.

These measures mandate that companies importing EVs for sale in Thailand must commence production this year.

The NESDC report regarding the economic situation in the fourth quarter of 2023 and the economic trends for 2024 includes a section focusing on the trends in the electric vehicle (EV) industry.

In 2023, the number of new registrations for electric vehicles (EVs) reached 76,538, marking a 695.9% increase compared to the 9,617 registrations in 2022. The new registrations for vehicles using traditional fuel stood at 481,609, showing an 11.3% decrease from 543,072 registrations in 2022. This resulted in the proportion of new EV registrations to total vehicle registrations reaching 11.6% in 2023, up from 1.5% in 2022.

In 2023, the new registrations for EV brands were for BYD (China) – 30,467; Neta (China) – 12,777; MG (China) – 12,462; Tesla (USA) – 8,206; GWM (ORA) (China) – 6,746 vehicles

The significant increase in new registrations of electric vehicles in 2023 can be attributed to the success of government incentives to promote EV usage, particularly under the EV3.0 and EV3.5 policies.

However, in 2023, the production of electric vehicles in Thailand was still in its early stages, with investment going into the construction factories and production lines. Therefore, electric vehicles sold in Thailand were mostly imported.

The Board of Investment (BOI) has introduced investment promotion measures for the modern automotive industry or EVs, including production ratios for EVs to offset imports, with a 1:1 ratio in 2024 (importing 1 EV for every 1 locally produced EV) and a 1:1.5 ratio in 2025 (importing 1 EV for every 1.5 locally produced EVs)

Production capacity of EVs in Thailand, all of which are from Chinese car manufacturers, the breakdown by brand is as follows: Neta: 200,000, Changan: 100,000-200,000 vehicles (initial production capacity of 100,000 vehicles), BYD: 150,000, GM: 100,000 and GWM: 80,000 vehicles. Production capacity for the GAC AION has not been specified.

If the production capacity of electric vehicle factories set up by various countries can meet the conditions of the incentives, it will help promote Thailand as a production base for electric vehicles and key electric components globally.

NESDC assesses that private sector investment will be a driving force for Thailand’s economy in 2024. In 2023, the total value of investment promotion applications through BOI amounted to 850 billion baht, the highest in five years, with a significant increase of 43.4% compared to the previous year. This includes approved investment projects and investment promotion certificates worth 750 billion baht and 490 billion baht, respectively.

Supporting factors from the investment promotion policy under the 5-year (2023-2027) investment promotion strategy are aimed at restructuring the Thai economy through promoting investment in 12 targeted industries.

The increased value of investment promotion applications corresponds to the improved business confidence index, which reached 54.9 in 2024 while the overall business confidence index stabilized at 50.0 for the first time in five years, reflecting continuous business sector recovery.

NESDC suggests that all projects by entrepreneurs and investment promotion certificate holders approved during the 2021-2023 period be accelerated, along with expediting approvals for projects previously submitted for investment promotion. They also recommend fast-tracking factory operators who have received business operation licenses to start operations sooner, especially medium and large-sized factories, to boost production capacity, employment, and new investments.