Chinese pure electric vehicle (EV) manufacturers are on the offensive in Thailand. BYD has launched a new model that already accounts for 40% of monthly pure electric vehicle sales in Thailand. Chinese companies alone account for 70% of Thailand’s pure electric vehicle market. Japanese companies, which dominate 80% of the hybrid (HV) and engine car market, have little presence in the pure electric vehicle market in Thailand. Chinese companies will take advantage of Thai government subsidies to establish a foothold in Thailand as a litmus test to capture the Southeast Asian market.
Shanghai Auto ‘turning Thailand into hub’
At the Future Mobility Asia 2023, a new-generation vehicle forum held in Bangkok in mid-May, SAIC executives who took the stage as panelists made bold statements about their desire to position Thailand as a hub for pure electric vehicle production. SAIC will set up a joint venture with CP Group, Thailand’s largest consortium, to sell pure electric vehicles in Thailand under the MG brand. SAIC is one of the first large Chinese car companies to enter the Thai market, and has delivered 10,000 pure electric vehicles in Thailand.
As a strategically important condition for the popularization of pure electric vehicles in Thailand, the executive pointed out three points: price, production and new models. Starting from 2022, the Thai government will pay a maximum of 150,000 baht (about 31,000 yuan) as a sales subsidy for pure electric vehicles on the condition of localized production, and the price of pure electric vehicles is almost the same as that of engine cars.
In addition, as pure electric vehicles become affordable and sales increase, the formation of an environment where manufacturers can enjoy the advantages of scale. In the future, “the key is not whether the engine car or pure electric car, but whether it is a good model.”
BYD meets three criteria
Fully meeting the above three conditions and beginning to sweep the Thai pure electric vehicle market is BYD. According to data from AutoLife Thailand, an automotive professional media, sales of pure electric vehicles in Thailand reached a new high of 6,262 units in March 2023, up 9.7 times from the same period last year. BYD “ATTO 3” accounted for nearly 40%.
BYD’s workhorse model, the ATTO 3, went on sale in Thailand in November 2022 and quickly overtook other models to take the top spot. BYD announced that it will build a new passenger car factory in Thailand, and pure electric vehicles will be subsidized. By launching new models, BYD has become a popular model in Thailand and can also enjoy the advantages of scale.
Chinese battery-electric vehicles outside BYD are also hoping for rapid adoption. Changan Automobile Group announced in April that it will build a new electric vehicle plant in Thailand, mainly pure electric vehicles. The investment is 9.8 billion baht and is expected to be completed in a few years. The initial annual production capacity is expected to be 100,000 vehicles, and products such as vehicle batteries will also be produced.
Thailand is not very wary of China
Great Wall Motor will also enter the Thai market by acquiring General Motors’ Thai plant in 2020. Plans were put forward to invest 22.6 billion baht to renovate the plant, with plans to start localized production as early as 2024. In addition, Chery Automobile, Geely Automobile and others are also said to be interested in entering the Thai market.
At present, pure electric vehicles account for a small proportion of overall new car sales in Thailand, but if it is limited to pure electric vehicles, Chinese manufacturers account for 70% of the share. Thailand has always pursued all-round diplomacy, and there are many overseas Chinese consortia. Relatively, the vigilance against China is not strong, and it is expected that China Pure Electric Vehicle Popularization will Further strengthening.
In terms of subsidies and tax cuts, Japanese car companies lag behind
In February 2022, the Thai government introduced a new policy to accelerate the attraction of Battery electric vehicle (EV). The content is to provide a maximum subsidy of 150000 Thai baht for passenger cars below 2 million Thai baht, with localized production starting in 2024 as the condition.
From the perspective of goods tax, the tax rate for passenger cars will be reduced from 8 percent to 2 percent, and pickup trucks will be exempt. In addition, for manufacturers, vehicle import tariffs are expected to be reduced by up to 40% from 2022 to 2023.
On the other hand, in terms of domestic production in Thailand as a condition for tax reduction, the same number of pure electric vehicles need to be produced in Thailand in 2024 as imported vehicles. After 2025, it should be increased to 1.5 times, which can be seen the intensity of attract investment.
Chinese companies continue to put pure electric vehicles in Thailand, while Japanese companies lack a presence. Toyota launched its flagship pure electric vehicle “bZ4X,” but according to AutoLife Thailand, only two bZ4X units were sold in March. Nissan LEAF (Chinese name: Ling feng) only has six units.
Tesla has officially launched sales in Thailand since 2023, and the March sales volume of the main Model “Model Y” was 1,034 units, second only to BYD’s ATTO 3. It is reported that the Japanese auto giants account for 80% of the overall new car sales in Thailand. In this case, the Japanese auto giants need to figure out how to take on the Chinese companies that have consolidated their position as early movers.