EV push to accelerate Thailand’s efforts against climate change
Thailand is betting on a future driven by electric vehicles (EVs), while big businesses have laid out ambitious plans to become carbon neutral in the next couple of decades.
The Thai government is expected to announce a new incentives package by the end of this year or early next year to promote electric vehicles.
The move is part of Thailand’s efforts to reduce greenhouse gas emissions.
Global warming will be firmly on the agenda of world leaders when they meet at the UN Climate Change Conference (COP26) in Glasgow, Britain, from October 31 to November 12.
Deputy Prime Minister Supattanapong Punmeechaow, who is in charge of the EV promotion project, has assigned the Finance Ministry to come up with new incentives to promote the use and manufacture of EVs.
“There is room to reduce tax rates or offer other incentives to support manufacturers and users,” said Lavaron Sangsnit, director-general at the Excise Department.
The department has in recent years offered a low excise tax rate for electric-powered vehicles. However, tax rates at zero to 2 percent have not led to any significant increase in the manufacture of EVs in Thailand.
Loaded in favor of China
Thailand’s free-trade agreement with China gives Chinese electric cars an advantage over rivals due to the zero import tariff they enjoy as compared with the 20 percent rate levied on Japanese EVs. This has resulted in Chinese EVs enjoying a huge price advantage in Thailand. However, the price of electric cars remains high when compared with internal combustion engine cars manufactured in Thailand.
Some experts have called for tax rebates or other incentives for customers who want to purchase EVs.
However, declining tax revenue amid slower economic growth and the impact of COVID-19 is making the government reluctant to offer incentives that could further strain the state coffers.
“Incentives will sharply lower tax revenues. The challenge for the government is how to manage a fall in revenue amid rising public debt,” said a senior official at the Finance Ministry, who asked not to be named. Another issue is how to promote local EV production if consumers get tax refunds from purchasing EVs which are imported, he noted.
Krisda Utamote, president of the Electric Vehicle Association of Thailand (EVAT), said the current excise tax rates on EVs are relatively low but the government may need to increase tax rates on fossil fuel-powered vehicles to balance tax revenue.
Actions needed to promote use of EVs
Critics believe Thailand has been slow off the blocks in adopting EVs.
Although policymakers did talk a lot about promoting EVs, they failed to take substantial action, said Praipol Kumsap, an economist specializing in energy.
He suggested that the government provide incentives to consumers in order to create demand.
“We should learn from our experience of promoting the existing automotive industry, which started from local market demand,” he said.
Manufacturers will not make EVs if they do not see many electric cars on the streets of Bangkok and other cities, he said.
The government should, however, also provide local manufacturers some relief.
Praipol praised the plying of electric cars in Thailand despite inadequate charging stations.
He himself bought an imported MG ZS brand battery electric vehicle (BEV) two years ago with a Bt1.2-million price tag.
The car travels 337 kilometers with one charge. He said driving in Bangkok and neighboring provinces is comfortable because the energy cost is low at about Bt200 a week. Maintenance cost is also low compared with conventional cars. The car’s torque is impressive, and its efficient acceleration makes it easy to overtake other cars, he said of his experience driving an EV.
A major inconvenience is the limited electric charging stations available in Thailand, he said.
He wants the government to be proactive in helping the private sector build more charging stations.
Thailand plans to achieve carbon-neutral status by 2065, while China plans to do so by 2060.
“To achieve the goal, the country needs to reduce emissions. Planting of more trees will not help much, as land is a limited resource,” said famed ecologist Thon Thamrongnawasawat.
Thailand and the whole world have limited area for tree planting, so the viable option is to reduce the emission of greenhouse gases, he said. He fully supports the adoption of EVs.
Chinese EVs well ahead
Great Wall Motor (GWM), a Chinese car manufacturer, recently advertised its ORA Goodcat model, offering a range per charge of between 400 to 500 kilometers. They are reaching out to Thai customers to book the model, but prices will be officially set on October 29.
The model is popular in China with prices ranging between US$16,000 to $22,000.
GWM bought General Motors’ car manufacturing plant in Rayong province early last year. GWM plans to manufacture 80,000 cars a year for Thailand and export markets, especially in ASEAN. It plans to start manufacturing EVs in 2023. Meanwhile, Thai-Chinese carmaker SAIC Motor-CP currently claims to be the leader in the BEV market.
“All major car manufacturers applied for the Board of Investment’s privileges to assemble EVs in Thailand, but so far only small players, like Fomm and Takano, have run their BEV production lines,” said Krisda. He is optimistic that Thailand will become the EV production hub for ASEAN.
Thailand plans to manufacture zero-emission vehicles (ZEV) — BEV, hydrogen and fuel cells — to make up 30 percent of total vehicles made in the country by 2030, according to the Energy Ministry.
The production target will cover 725,000 passenger cars and pickup trucks, 675,000 motorcycles and 34,000 buses and trucks for both local and export markets.
At the same time, the government wants to persuade consumers, corporations and state agencies to use 440,000 passenger cars and pickup trucks, 650,000 motorcycles, and 33,000 buses and trucks.
In a boost for related infrastructure, 12,000 fast chargers and 1,450 swapping battery stations would be available throughout the country by 2030.
Thailand is just in the initial stages of migrating to EVs. Last year 191,957 EV units were registered, comprising 162,081 hybrid electric vehicles (HEV), 24,191 plug-in hybrid electric vehicles (PHEV) and 5,685 BEVs, according to the EVAT. The market is growing as of August 31 — HEV sales rose to 186,980 units, PHEV to 28,866 units and BEV to 9,060 units.
As of September, there were 12 electric charging service providers with a combined 2,285 outlets comprising 1,511 normal chargers and 774 fast chargers.
These public chargers are at 693 locations throughout the country, according to the Land Transport Department.
Corporates set ambitious goal
Some local corporations have pledged to reach net-zero emissions by 2050. They include giants, such as PTT Global Chemical Public Company Limited, Bangchak Group and the state-owned Electricity Generating Authority of Thailand (EGAT).
Charoen Pokphand Group is committed to be a zero-waste organization and carbon neutral by 2030.
The EGAT is set to generate up to 5,325 megawatts of electricity from hydro-floating solar hybrids by 2037.
It plans to use hydrogen cell fuel to produce electricity and store carbon, a byproduct of electricity, deep underground.
The EGAT aims to increase its efficiency in electricity generation in order to reduce emissions by 8 million tonnes by 2037.
It also plans to grow trees, including mangroves, on up to 1 million rai in the next 10 years in order to increase its carbon sink and offset its carbon emissions.
By Thai PBS World’s Business Desk