Thailand: EV subsidies and tax incentives, Chinese OEMs launching budget EVs

2022 production expected to be 1.75 million due to semiconductor shortage and Ukraine war

2022/12/12

Summary

Good Cat GT
Great Wall Motor’s ORA Grand Cat premium coupe EV
(exhibited in Thailand International Motor Expo in December 2022)

  The Thai government aims to make electric vehicles (EVs) account for 30% of domestic vehicle production by 2030 and make Thailand an EV production hub in the ASEAN region. Sales volume of EVs in Thailand in January-October 2022 increased from 1,721 units for the same period of 2021 to 7,552 units. In 2022, Chinese OEMs such as Great Wall Motor and BYD launched new EV models, while DFSK and NETA Auto introduced low-priced EV models at around THB 330,000-550,000. Mercedes-Benz, BMW, and Volvo Car released premium EV models, and Toyota also launched its first EV-dedicated model bZ4X.

  The Thai government started its subsidy program for EVs from September 2022 to promote the use of EVs. The applicable EVs receive a subsidy of THB 70,000-150,000 per unit. The government also grants tax incentives for Evs including excise, road, and import tax reduction.

  The government also formulated incentives for production of batteries and establishment of charging facilities which are keys for the spread of Evs. The Thailand Board of Investment (BOI) introduces import tax cut for EV batteries and corporate income tax exemption for charging stations. Given these incentives, a number of companies took part in activities related to EV battery production. SAIC Motor-CP is building a new EV battery production plant. The Thai public coal company Banpu, the bus operation company Cherdchai, and the battery manufacturer Durapower will jointly establish a battery plant for electric buses.

  Regarding the establishment of EV charging facilities, various enterprises such as Thailand-based Energy Absolute and Thai public oil company PTT are setting up charging stations and chargers.

  Production in Thailand in 2021 increased 18.1% year-over-year (y/y) to 1.686 million units, while domestic sales declined 3.7% y/y to 775,000 units. Exports from Thailand grew 30.4% y/y to 959,000 units. Although the Covid-19 lockdown and global semiconductor shortages had an impact on the automotive industry, 2021 sales exceeded the Federation of Thai Industries (FTI)’ target of 750,000 units with the government’s support measures to encourage consumer spending and the Thailand Motor Expo exhibition in December. Output in January-October 2022 increased 12.4% y/y to 1.535 million units, and domestic sales rose 15.4% y/y to 769,000 units. Exports increased 5.5% y/y to 801,000 units. Both sales and production grew thanks to the launch of new car models, further easements of the Covid-19 lockdown restrictions, the reopening of the country to more international tourism and more investors from overseas countries, as well as other support measures to encourage more economic activities and consumer spending.

  In August 2022, the FTI lowered its production outlook for the full-year 2022 from 1.8 million units, which it forecasted in the beginning of the year, to 1.75 million units. Of this, output for domestic sales was raised from 800,000 to 850,000 units, while production for exports was lowered from 1 million to 900,000. Production outlook was lowered because of the prolonged Russia-Ukraine war, the Shanghai lockdown in April and May, Myanmar’s measure to ban vehicle imports, and semiconductor supply shortages.

 

Related reports:
ASEAN Vehicle Sales and Production Update (Q3 2022) (Nov. 2022)
Global Motorcycle Production and Sales: Overview of China, India, and ASEAN (Aug. 2022)
ASEAN: Promoting use and production of EVs to achieve carbon neutrality (Jul. 2022)
Toyota's BEV Strategy: Plans for 3.5 million BEVs, including 1 million Lexus by 2030 (May. 2022)
Bangkok International Motor Show 2022 (2): Keep Moving Forward Together (Apr. 2022)
Bangkok International Motor Show 2022 (1): Keep Moving Forward Together (Apr. 2022)
BYD: Car sales up 75% to 730k in 2021, in-house NEV development (Mar. 2022)
Great Wall Motor: Becoming a global high-tech mobility company, sales of 4M units by 2025 (Nov. 2021)
Thailand: Acceleration as EV hub, increasing battery production (Nov. 2021)

 

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