Thailand aims to become the hub of electric vehicles

Major Thai companies are investing heavily to drive the adoption of electric cars as Thailand aims to become the EV hub of Southeast Asia within the next decade.

The world is going green and Thailand is jumping on the bandwagon.

The National Electric Vehicle Policy Committee recently revealed that it is considering a new EV production target that would allow them to account for half of Thailand's car production by 2030.

The country is expected to manufacture one million EVs a year by then.

This goal is a clear signal to carmakers, energy producers, and other businesses to seize the opportunity to invest in EV infrastructure, as the number of people driving electric cars is expected to increase significantly in the coming years.

According to the Thailand Board of Investment, investment in EV manufacturing and related infrastructure reached 79 billion baht (€2 billion) during the 2017-2019 period.

Over the next three years, these expenditures are expected to increase at a much faster rate than even the record pace set during the previous three-year period.

The electric vehicle market is a rapidly expanding sector in Thailand.

1,200 electric vehicle charging stations in Thailand

According to the Ministry of Energy, there are currently 1,200 EV charging stations in the country.

The government has not set a specific target for the number of such stations.

Most EV stations are being built by private companies keen to take advantage of growing demand, and the government has an official policy promoting EVs.

Nikkei Asia has learned that at least six major companies have entered the EV infrastructure and charging business.

Energy Absolute, a renewable energy producer, already has 400 EV charging stations across Thailand and is developing apps to help electric car owners find nearby charging points.

The company aims to have up to 1,600 stations next year.

PTTOR, the retail arm of Thai oil and gas conglomerate PTT, is also trying to catch the wave.

The company has built 30 charging stations in and around Bangkok, and hopes to have 300 EV charging stations across the country within the next two years.

Other companies, such as gas station operator PTG Energy and Bangchak, an energy conglomerate, are collaborating with government agencies and entering the sector.

Siam Cement Group (SCG) has launched its EV Solution Platform, which offers integrated EV supply and after-sales services.

The company will provide a range of products and services, including EV supplier selection and sourcing of energy storage systems, a modern battery system for EVs.

It also installs EV charging stations in office buildings and homes.

“SCG also offers financial services that offer various financial packages for leasing charging stations and other options,” said Abhijit Datta, Managing Director of SCG International.

As many companies compete in the EV charging station sector, the country's Energy Regulatory Commission initially set the price of EV charging at a relatively low 2.63 baht (0.066 euros) per kilowatt-hour to promote EV use.

However, some newcomers, such as PTTOR, are trying to attract consumers by offering free charging for a few months.

Thailand's moves to promote EVs could also affect the strategies of global automakers.

From car manufacturing hub to EV hub

About twenty years ago, Thailand set out to become the ASEAN auto manufacturing hub, successfully attracting investment from major Japanese manufacturers, followed by European and American manufacturers.

Today, the kingdom is trying to become “Thailand 4.0,” a country whose industries use next-generation technologies such as 5G networks, robots, and EVs.

Government support for EV-related businesses is part of this effort to transform Thailand by capitalizing on the high added value of EVs.

At the same time, the government is creating the Eastern Economic Corridor — a chain of investment zones aimed at fostering new industries, particularly in the EV sector.

With the EEC's strategic location and new investments in the EV sector, Thailand aims to become ASEAN's leading manufacturer and one of the leading exporters of EVs.

Toyota was the first carmaker to offer EVs in Thailand, as well as plug-in hybrid vehicles.

In recent years, Chinese manufacturers have been more aggressive, notably SAIC Motor, which launched an electric version of its MG model.

The latest move is from China's Great Wall Motors, which took over GM's car plant in the eastern coastal province of Rayong in February last year.

Great Wall says it is ready to launch electric models this year.

As the number of new entrants into Thailand's EV market increases, the supply chain poses a major challenge for the kingdom to achieve its ambitious target, said Surapong Phaisitpattanapong, a spokesperson for the Federation of Thai Industries' Automotive Industry Club.

He points out that they are trying to transition from being manufacturers of internal combustion engine parts to suppliers of EV components, such as batteries, electric motors and converters, which could take a long time.

“It’s a question of economies of scale,” Mr. Surapong told Nikkei Asia.

“If the number of EV users increases significantly, it will be worth the investment, and everyone, including auto parts manufacturers, will be ready to switch to producing EV parts, and this will create supply chains ready for EV development, but it will take time.”

The government also hasn't provided enough subsidies to give EV sales the boost it's looking for.

Only indirect subsidy is given to EV parts manufacturers and assemblers through the Board of Investment to attract foreign direct investment.

“We believe there should be a more direct subsidy for EV buyers to promote EVs, but we have not yet seen the government provide such subsidies,” Mr. Surapong said.

See also:

Thailand aims to have only electric vehicles by 2035

Thailand aims to produce 30% of electric vehicles by 2030

Source: asia.nikkei.com