Thailand’s foreign direct investment skyrockets with focus on EV industry

Investment attraction to Thailand has seen a remarkable surge in the first half of this year. The nation registered a 70% year-on-year increase to an impressive 364 billion baht, according to the Board of Investment (BoI). This boost, particularly contributed by an astonishing 141% soar in foreign direct investment, serves as a testament to Thailand’s status as a preferred manufacturing hub for international firms.

The investment escalation was marked by a rise in project applications totalling 891, marking an 18% rise compared to the equivalent period in 2022.

The majority of these applications, 464 to be precise, fall under the prioritized industrial categories which account for a cumulative value of 287 billion baht, making up 79% of the total value of applications. These industries majorly include electronics, food processing, and automotive sectors with a special focus on the electric vehicle (EV) supply chain. Narit Therdsteerasukdi, Secretary-General of the BoI, said…

“Investment applications in the first half show a positive trend and foreign investment in particular continued to increase at a very high rate, especially in electronics and EVs, which are among our priority sectors.

“This reflects the confidence of foreign investors in Thailand regarding our fundamentals, well-developed infrastructure and our strong supply chain.”

Amidst these substantial factors, Thailand’s economic growth projection indicates improvement coupled with the International Institute for Management Development’s recent disclosure expanding Thailand’s competitiveness ranking for 2023 by three places to rank 30th among 64 global economies evaluated by the IMD.

Foreign direct investment applications registered a 33% surge to touch 507 projects during the initial half of this year, as per the BoI. Narit said…

“China was ranked first in terms of investment value, with 61.5 billion baht from 132 projects.”

Following China was Singapore, with a value of 59.1 billion baht, and Japan at 35.3 billion.

The electrical appliances and electronics industry were the receivers of maximum investment, leading the sector’s ranking with 106 projects holding an investment value of 160 billion baht, up sevenfold from the same timeframe last year.

The substantial boost in the industry is credited to the ongoing relocation trend pursued by electronic components manufacturers in an endeavour to mitigate the risk associated with the US-China trade war and political tensions worldwide.

Over the preceding six months, the automotive and auto parts industry reported 80 investment applications valued at a total of 19.6 billion baht. The majority of these projects revolved around the production of components such as tyres, axles, hybrid transmission systems and electric charging stations catering to EVs.

A total of 14 EV battery manufacturers have benefited from investment promotion, and their collective projects hold an estimated 33.9 billion baht worth, with an annual production capacity of 276,640 units, reported Bangkok Post.