19 May 2024

Although electric car has yet to go mainstream in Thailand, there is a foregone conclusion that its popularity will significantly increase in the next few years, fueled by a wider variety of choices, recharging stations and, of course, more affordable price.

A number of electric vehicles (EV), some of them are made in Thailand, have recently been launched earlier this year to excite the market. After all, there is a general consensus among motorists that it’s time to use eco-friendly vehicles amid rising concerns over the air pollution globally.

However, the Thai motorists have so far have not fully gone EV. Many consumers have not had full understanding about EVs while some are waiting for more availability of infrastructure to support EV such as recharging stations. Also, some EV models are still very expensive, especially when compared with certain models of eco-cars.

In fact, Thai consumers have been familiar with the concept of EV through hybrid engine which is part of several car models. But Thai car drivers have slowly embraced EV because of their concerns over its capacity especially for the long-distance drive. At the same time, the choices of EV cars currently available on the market are still limited for consumers.

The trend in the past few years nonetheless suggest that the era of EV is coming, driven by motorist’ enthusiasm. A last year survey by Frost & Sullivan suggested that 37 percent of Asians are currently interested in owning EVs, with those in the Philippines, Thailand and Indonesia having the highest purchasing power. The reasons behind their motivation to purchase EVs included safety, convenience and financial readiness.

Also, the Thai government has supported the industry by introducing incentives for automakers to turn green and encouraging petrol companies to invest in recharging units.

This year with a number of automakers seeking the Board of Investment (BOI)’s incentives to produce EVs here.

Currently, only some 120,000 passenger EV cars are running on Thailand’s roads, representing only 1.2 percent of the total passenger cars. The Thai government plans to increase the number of EVs to rise to 1.2 million units by 2036, which would help cut energy consumption by 30 percent compared to 2010, according to the energy conservation plan. By that time, Thailand is expected to have 690 recharging stations nationwide.

In the next five years, industries forecast that the EV market share has a potential to increase to one-fourth, or 240,000 units, of the total car sales nationwide. Eco-hybrid cars and mild-hybrid vehicles are likely to accelerate the growth of EV in the nascent stage.

Opportunity and challenge.

The coming of EV can present both opportunity and challenge for industries involved. For example, it will be a boon for EV battery producers.

Although Thailand’s EV market remains small, the government incentives to boost local output of environmentally friendly cars have encouraged global companies to produce electric cars and EV batteries in Thailand. Some have planned to produce EVs in Thailand at a large scale for export as existing production bases of EV batteries in the world now cannot serve the soaring demand.

Kasikorn Research predicts that when the EV production is approaching its full capacity in 2023, at least 260,000 units of EV batteries will be rolled out to serve the demands in Thailand. Also, there is a possibility that EV battery companies will use Thailand as a base for exports.

Thus, Thailand has emerged as a potential base for EV batteries for export to countries such as Japan and ASEAN. Kasikorn Research forecasts that in 2023, Thailand will produce at least 170,000 EV batteries for export.

The production of EV will also increase the opportunity for the producers of power inverters and on-board chargers which are EV parts. Some of international companies have begun investing in Thailand to sell these EV components to other countries.

But the coming of the EV cars also presents challenges for certain industries. For example, producers involved in the internal combustion engine supply chain may face lesser demands in the future if EV is widely popular among the motorists.

Moreover, producers of some traditional auto components may have to modify certain qualifications to make their products EV compatible such as braking and gear systems.