Thailand: Chinese OEMs to build EV production facilities
Government to reduce EV subsidies in new incentives for 2024-2027
2024/03/05
- Summary
- Thai government: EV subsidies reduced from 2024, EV importers required to produce EVs locally
- Chinese OEMs: JAC and Changan Automobile enter Thai market, EV local production to commence
- Incentives for EV battery production
- EV sales in Thailand for 2023 account for 9.3% of overall vehicle sales
- 2024 production in Thailand is expected to increase by 3% to 1.9 million units (FTI’s outlook)
- Thai auto market: Sales of 1t pickup trucks decrease by 25% y/y
- Production Forecast by GlobalData: Thai production expected to be 2.07 million units in 2026
Summary
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| Changan Automobile’s Deepal S07 electric SUV (exhibited in Thailand International Motor Expo in November 2023) |
The government of Thailand aims to make electric vehicles (EVs) account for 30% of domestic vehicle production by 2030. Along with this objective, on December 19, 2023, the Thai cabinet approved the new EV incentive package for 2024-2027. Compared to the program which ended at the end of 2023, EV subsidies were reduced and will be lowered further during the period. As for tax incentives, the excise tax reduction on electric passenger cars from 8% to 2% will remain in place. In addition, when finished electric vehicles are imported with government subsidies, the required local production ratio for EVs has been increased.
In the Thai market, EV sales have been surging. Chinese OEMs are increasing imports and sales of EVs, adopting the Thai government’s EV incentive package and a zero tariff due to the ASEAN-China Free Trade Agreement (ACFTA). In 2023, the JAC Group and Changan Automobile officially entered the Thai market. Chinese carmakers are launching a variety of new EVs ranging from hatchbacks and sedans to SUVs and MPVs. As a number of Chinese OEMs are required to produce EVs in Thailand to receive the government subsidies, they are hurriedly building EV production plants.
The Thai government is also offering incentive measures for production of batteries which are important components for EVs. Financial assistance and benefits will be provided to companies that produce battery cells for EVs if they meet certain requirements. Energy Absolute based in Thailand, SAIC Motor-CP, Chinese companies Gotion High-tech and SVOLT, and Thai PTT’s subsidiary Arun Plus are producing EV batteries.
2023 vehicle production in Thailand decreased by 2.2% year-over-year (y/y) to 1,841,686 units. Finished vehicle exports from the country increased by 11.7% y/y to 1,117,539 units, while domestic sales declined by 5.1% y/y to 841,448 units. Sales in Thailand were impacted by stringent requirements for auto loans, household debt, an economic slowdown, and a delay in the 2024 fiscal year budget.
According to the Federation of Thai Industries (FTI)’s outlook for 2024, vehicle production is expected to increase by 3.2% y/y to 1.9 million units, of which 1.15 million units are for export (an increase of 2.9% y/y) and 750,000 units for domestic sales (a decrease of 10.9% y/y).
Related reports:
Electric Vehicle (BEV/PHV/FCV) Sales Monthly Report (January 2024) (Feb. 2024)
ASEAN Vehicle Sales and Production Update (Q4 2023) (Feb. 2024)
Thailand International Motor Expo 2023 (2) (Dec. 2023)
Thailand International Motor Expo 2023 (1) (Dec. 2023)
ASEAN (2): Production and sales recovering to pre-pandemic levels (Aug. 2023)
ASEAN (1): Accelerating shift to EVs, and market entry of Chinese OEMs (Aug. 2023)
Arun Plus: The First of Thailand, EV Automotive Industry (Mar. 2023)
Thailand: EV subsidies and tax incentives, Chinese OEMs launching budget EVs (Dec. 2022)
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