The Thai government has introduced a new investment incentive program to encourage domestic production of EVs. The new incentives will exempt the payment of corporate tax for eight years for those who invest more than 5 billion baht (about 17 billion yen) to produce an EV.
Four types of key components, such as transmissions and regenerative brakes, will also be covered. The Thai government has set a goal of having 30% of the vehicles produced in Thailand be electric by 2030. The Board of Investment of Thailand (BOI) had a similar incentive program in place until the end of 2018. The reason behind the reintroduction is that the Thai government is dissatisfied with the lack of progress in EV production.
Under the previous system, 26 plans were approved, including plug-in hybrid vehicles (PHVs), mainly from Japanese companies, but so far only two EVs from emerging companies have begun production. Toyota and Mitsubishi are also planning to produce EVs, but they are expected to put PHVs first. Japanese cars account for about 90% of Thailand’s annual production of approximately 2 million units, but Chinese companies, which excel in EV production, are making inroads into the country.
Source: The Nikkei
PSR Analysis: Thailand wants to make EVs the pillar of future car manufacturing, but many Japanese brands, led by Toyota, are currently pushing PHVs instead of EVs. The view that Thailand is stressed by this may be correct in a way. China’s Great Wall Motor, which already has a wealth of EV manufacturing know-how, will start operating a new plant in Thailand in 2021. SAIC Motor, which has already made inroads into the market, is also likely to have its eye on EVs, and Japanese manufacturers may fall from their current overwhelmingly dominant position if they miss out on the EV shift. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
