Thailand aims for only electric vehicles by 2035

Thailand has announced an ambitious plan to move to only sell zero-emission electric vehicles by 2035 as it aims to be at the forefront of the electric car market. Right now in Thailand, less than 1% of the vehicles on the road are electric but an advisor to the Energy Ministry’s national policy committee said that it’s clear the world is heading that way and Thailand should grab hold of that market to help recover from the Covid-19 pandemic. The country already has a stable supply chain and strong production of conventional automobiles, so it is hoped that the transition to zero-emission vehicles will be successful.

The automotive industry brings in about 10% of Thailand’s economy and supports about 850, 000 employees. Other industries such as plastic, steel, iron, and petrochemicals are all heavily supported by the automotive industry. And 50% of cars produced in Thailand are exported around Southeast Asia, particularly Indonesia, Malaysia, and the Philippines.

The ambitious plan to make Thailand an electric vehicle country by 2035 has equally ambitious benchmarks along the way. A previous target of 30% of all vehicles registered to be electric vehicles has been upgraded to 50% by the end of this decade. But phasing out traditional gas guzzlers will require facilitation by the government to make the transition. Creating the appropriate infrastructure, developing regulations for EV manufacturing, and offering both tax incentives to manufacturers and consumer incentives to purchase electric cars will be necessary to push the public and the manufacturing sector to achieve this goal.

The Electric Vehicle Association of Thailand pointed out that letting the transition occur naturally with the growing popularity of electric vehicles may take too long, and that an ambitious target such as this is a good way to attract investors in these new technologies and manufacturing sectors. While zero-emission vehicle adoption is still low in Thailand with only about 1% of vehicles on the road being electric, the EV market has handled the economic ramifications of the Covid-19 pandemic much better than the traditional automotive market. Gas-hungry traditional cars saw depressed sales down 26% in 2020, but zero-emission electric vehicles recorded an increase of 1.4% during that same period. With the right implementation and incentivisation, Thailand’s dream of becoming Southeast Asia’s electronic vehicle production hub may be possible.

SOURCE: Bloomburg