Thai EV sales surge by 603% amid government incentives

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Battery electric vehicles (BEVs) sales in Thailand surged by 603% year-on-year to 73,568 units last year, with the upward trend expected to continue throughout this year, as per the Federation of Thai Industries (FTI). This growth is expected to outstrip that of internal combustion engine (ICE) vehicles, which witnessed a 13.7% year-on-year sales decline to 238,570 units in 2023, capturing a 30.7% market share in the passenger car segment. However, BEVs claimed a 9.4% market share in the same segment.

Despite Apple Inc.’s recent announcement of scrapping its decade-long effort to manufacture EVs, promising EV sales are attracting more investment from car and tech developers.

The state EV incentive packages have been instrumental in making EV prices more affordable, thereby catalysing the demand for EVs, stated Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for its Automotive Industry Club. The government has unveiled three packages to stimulate the production and consumption of EVs.

Last month, the National Electric Vehicle Policy Committee sanctioned incentives to encourage companies to transition their commercial fleets of large trucks and buses to BEVs. These incentives include a tax deduction granted to eligible companies, effective until December 31, 2025. The committee also approved cash grants for EV battery cell manufacturers.

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The Thai EV industry is also being driven by the EV3.5 and EV3.0 schemes previously launched by the government, according to Surapong. EV3.5, running from 2024 to 2027, comprises subsidies ranging between 5,000 (US$140) to 100,000 baht (US$2,814) for imported electric cars and motorcycles, alongside reductions in import duties and excise tax. EV manufacturers participating in EV3.5 are required to start domestic EV production in 2026.

During the Prayut Chan-o-cha administration, the committee approved EV3.0, including tax cuts and subsidies to promote EV consumption and production between 2022 and 2023. The subsidies vary from 70,000 baht (US$1,970) to 150,000 baht (US$4,221) depending on the vehicle type and model, with lower excise tax and import duties on completely knocked-down and completely built-up units.

EV confidence

The incentives, combined with the economic sentiment in Thailand, will instil confidence among potential car buyers, encouraging them to purchase EVs. If the prices of BEVs, particularly imports, are between 600,000 (US$16,887) and 1 million baht (US$28,145), more people are likely to buy these cars, said Surapong.

Krisda Utamote, president of the Electric Vehicle Association of Thailand (EVAT), attributed the rapid EV market growth to high oil prices, technological advancements, and environmental concerns.

In January this year, BEV sales in the country accounted for 17.8% of total car sales, according to the Automotive Industry Club. The government has set a target for BEVs to constitute 30% of total car manufacturing by 2030, producing 725,000 zero-emission cars, 675,000 electric motorcycles, and 34,000 electric buses and trucks.

Surapong dismissed the belief that a limited number of EV charging outlets, especially in public places, will impact EV sales and production. With the growing demand for EVs, developers and operators of charging facilities are expected to increase their numbers, making chargers more publicly accessible, reported Bangkok Post.

Apple plans to transfer employees working on the EV project to the artificial intelligence division, as per a Bloomberg News report. This decision comes as several EV makers, primarily car companies in China, announced or are pondering more investment in EV assembly and battery manufacturing.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

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