BYD’s mid-size SUV, Sealion 6 DM-i (Unveiled at the Bangkok International Motor Show in March 2025)

　The Thai government has set a policy of making electric vehicles (EVs) account for 30% of domestic automobile production by 2030 and has been expanding EV production, but EV sales have been slowing down since around mid-2024. Conversely, the demand for hybrid vehicles (HVs) has been expanding. The Thai government decided to implement tax incentives for HVs in July 2024, stating that until the powertrain that will drive the future market is determined, it needs policies that align with global trends rather than focusing solely on BEVs (battery electric vehicles). The government also reduced excise taxes on plug-in hybrid vehicles (PHVs) and mild hybrid vehicles (MHVs).

　The EV sales volume in the Thai market expanded rapidly, by approximately five times the 2021 volume in 2022 and approximately seven times the 2022 volume in 2023. However, the EV sales volume in 2024 reached only 71,645 units in 2024, a decrease of 8.3% from the previous year. On the other hand, sales of hybrid vehicles (HVs) increased to 126,629 units in 2024, about 1.5 times the previous year’s volume. The total number of electrified vehicles (xEVs), including EVs, PHVs, and HVs, was 207,646, expanding the share of electric vehicles in total vehicle sales volume from 20.7% in 2023 to 32.7% in 2024.

　Chinese OEMs have been taking advantage of the Thai government's support for the spread of EVs and the 0% tariffs under the ASEAN-China Free Trade Agreement (ACFTA) to import and sell EVs. In addition, in response to the recent increase in demand for hybrid vehicles in the Thai market, HV and PHV models have also been introduced.

　Many Chinese OEMs are importing and selling EVs, making use of the Thai government's EV subsidies, so that a certain number of locally produced EVs is mandatory. In 2024, BYD Auto Co. Ltd. (BYD) and GAC Aion New Energy Automobile Co., Ltd. (GAC Aion) started operating new plants, and Wuling outsourced production to local manufacturers. In 2025, Changan Automobile Co., Ltd. (Changan Automobile), Neta Zhihe New Energy Vehicle Technology (Shanghai) Co., Ltd. (Neta Auto), Chery Automobile Co., Ltd. (Chery Automobile), and others are scheduled to start production in Thailand.

　The Thai government is also offering preferential treatment for the production of batteries, a key component of xEVs. The excise tax on EV batteries is reduced from 8% to 1% and a subsidy of THB 24 billion is provided to support manufacturing. In 2024, Energy Absolute PCL of Thailand, a joint venture plant between Banpu NEXT Co., Ltd. of Thailand and Durapower Technology (Singapore) Pte. Ltd. (Durapower) of Singapore, began mass production of EV batteries. In 2025, Sunwoda Electronic Co., Ltd. (Sunwoda) of China is expected to start up a new plant.

　According to a forecast released by the Federation of Thai Industries (FTI) in January 2025, vehicle production in 2025 is expected to increase by 2.1% year-over-year (y/y) to 1.5 million units. The breakdown is as follows: 1 million units for export (down 1.9% y/y) and 500,000 units for domestic sales (down 21.2% y/y). Production for export is also expected to be affected by the tariff increases being implemented by U.S. President Trump going forward.

Related Reports:
Bangkok International Motor Show 2025 (2) Japanese & European OEMs (May. 2025)
Bangkok International Motor Show 2025 (1) Chinese OEMs (Apr. 2025)
ASEAN Vehicle Sales and Production Update (Q4 2024) (Feb. 2025)
Thailand International Motor Expo 2024 (2) Japanese OEMs and Others (Jan. 2025)
Thailand International Motor Expo 2024 (1) Chinese OEMs (Dec. 2024)
Chinese OEM Overseas Expansion Activities: SAIC, Great Wall Motor (Dec. 2024)
Chinese OEM Overseas Expansion Activities: Chery, Changan (Nov. 2024)
ASEAN (2) Increase in Chinese car production (Oct. 2024)
ASEAN (1) EV Promotion Policies; Increasing Entry of Chinese OEMs (Sep. 2024)
Thailand: Chinese OEMs to build EV production facilities (Mar. 2024)