Having been successful as a global destination for pick-up truck and small car production, Thailand has been for some time now looking to jump start the development of a green car industry churning out hybrid, electric and hydrogen vehicles. Things are progressing, and now the Bangkok Post reports that a roadmap for EV industry is expected to surface this month.
According to the report, the Kingdom’s Board of Investment (BoI) will discuss plans for the development of EVs at a meeting led by Prime Minister Prayut Chan-o-cha on March 24.
Next-generation cars is one of 10 strategic industries Thailand is focusing on as it tries to shift to a high-tech, innovation-based economy. The others are smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
Deputy PM Somkid Jatusripitak said the meeting will discuss details of five- and 10-year plans for the EV industry. “We will finalise a plan that will serve as a guideline for related industries, offering a timeline for our EV development plans,” he said.
The Thai government will have to set the ball rolling by dangling attractive carrots to carmakers, and the BoI’s incentive package is expected to include perks such as a 15-year corporate income tax holiday. If investors spend on R&D, they can ask for financial support from the government, which will set up a 10 billion baht competitiveness fund for the purpose.
The reason why carmakers haven’t been knocking on Thailand’s door to pour in EV investment is the lack of demand for such advanced cars. But Somkid is confident that this will change soon, predicting that demand for EVs will grow within the next five years because of fuel price fluctuation and the public’s concern for the environment.
“If car manufacturers do not act now regarding EVs, they will be left behind. Development of the segment takes time, and the faster the better,” he said, adding that BMW – which currently makes plug-in hybrids in Thailand – has expressed interest in building a battery facility in Thailand. Mercedes-Benz is also considering a PHEV battery factory there.
Separately, industry minister Uttama Savanayana told the Federation of Thai Industries (FTI) that the government will soon announce a new investment package to support investment in EVs. “The government plans to set up talks with the FTI in April to announce government policies and support to be given to the private sector to encourage them to start real investment, especially in EV cars,” he said.
Thailand has set up the Eastern Economic Corridor (EEC) as a special location to accommodate investment in the 10 targeted industries. The EEC is a 4,800 hectare zone spanning across Chon Buri, Rayong and Chachoengsao provinces. Investors in the targeted fields enjoy the highest privileges if they set up shop in the EEC. Thailand is also reducing personal income tax for researchers to 17%, which is low for the region.
Instead of resting on its car production laurels, the “Detroit of the East” is laying the groundwork for the future. Malaysia also has incentives for car companies to produce hybrids and PHEVs, but the privileges depends on direct negotiation with the government. In contrast, Thailand’s automotive blueprints and requirements are clearly defined. While transparent, it’s rigid, and Malaysia’s package has been praised by some for its flexibility.