rethink sustainability

    Thailand’s push towards electric vehicles

    Thailand’s Push Towards Electric Vehicles

    The government has announced an ambitious plan to transition the country to electric vehicles over the next few years


    Asia is leading the way for many industries involved in the climate transition, and notable among them is the transportation sector. The region accounts for the largest share of electric battery sales worldwide, for example.1 While China, Japan, and South Korea lead the way in electric vehicles (EVs), Thailand has now made substantial inroads with its own ambitious targets.  Last year, the country published a roadmap to help it meet net zero goals by shifting 30% of all its automotive production into EVs by 2030. The government wants all cars to be electric by 2035.2


    This plan is ambitious to say the least. Thailand is often referred to as the ‘Detroit of Asia’.3 Between 2000 and 2017, Thailand’s auto production grew by 383%, with exports accounting for almost 60% of national production. 4 The tourism-reliant country, hard-hit by Covid-19, still saw the sales of cars, parts, and accessories grow by 170% year on year to May 2021, the fastest pace in more than eight years.5 The automotive industry contributes to about 10% of the economy. It employs 850,000 workers, and supports other industries, ranging from iron to steel, petrochemicals and plastic. 6


    A New Pathway

    Under the government’s new scheme, the transition to EVs will take place in three stages

    Under the government’s new scheme, the transition to EVs will take place in three stages. In Phase 1, which will run until 2022, the government will promote electric motorcycles and support the development of infrastructure nationwide.7 Phase 2 will take place between 2023 and 2025, when the EV industry will be developed, with a target to build 225,000 cars and pick-up trucks, 360,000 motorcycles and 18,000 buses/trucks, and will include the production of batteries.8 Phase 3 will run from 2026 and 2030, and the country will adopt a ‘30/30 policy’, working towards a target of producing 725,000 EV cars and pick-ups, plus 675,000 EV motorcycles by 2030, which would be 30% of all total production. 9 By 2035, the country aims to sell only zero-emission vehicles.10 It also wants every EV sold in the country to be manufactured domestically by then.11


    As things stand, less than 1% of all vehicles in Thailand are battery-powered. 12 Sceptics point out that there is limited charging infrastructure available for EVs in the country. They also suggest that consumer behaviour needs to change before the use of EVs will be widely adopted. Despite tax exemptions, for example, the purchase price of an average EV is about twice that of its internal combustion engine vehicle (ICEV) equivalent in Thailand, mostly likely because many automotive companies have manufacturing plants in the country, and consumers don’t have to pay additional import fees. 13 Making EVs more attractive to consumers will be an important part of getting their buy-in for the future.


    The government has said that it plans to address these infrastructure concerns, build tax incentives for EV growth, and develop regulations that promote EV manufacturing. 14 It is adding incentives to build more EV-charging infrastructure nationwide, with companies like PTT and EVLOMO among those that are working to add charging stations. 15


    Read about the transport revolution


    Investment Incentives

    The government’s plans have received a boost with the news that Foxconn is establishing new EV manufacturing facilities in the country, aiming to reach mass production by 2023.16 The company plans to produce 150,000 to 200,000 electric cars per year, first focusing on local markets, and then expanding into other countries in Southeast Asia.17


    We believe that Asia, as other parts of the globe, needs to move from an economic model that we characterise as Wasteful, Idle, Lopsided and Dirty (WILD) to a model that is Circular, Lean, Inclusive and Clean (CLIC™), as part of the fight towards achieving a net zero global future.


    The growth of the EV market in Thailand is a positive part of this transition. As proponents of Thailand’s approach point out, while the industry is young, it shows every sign of having a bright future, with Thailand’s Board of Investment (BOI) having already approved dozens of projects relating to EV production totalling over US$1.1 billion in value. 18 Several initiatives, including the plan to increase public sector purchases of EVs, will encourage further foreign direct investment (FDI). 19

    While Thailand’s plan for EV growth will not be without its roadblocks, it holds a great deal of growth potential

    While Thailand’s plan for EV growth will not be without its roadblocks, it holds a great deal of growth potential. It is a step in the right direction for a sustainable future.


    1 https://www.statista.com/topics/5654/electric-vehicles-in-asia-pacific/

    2 https://www.bloomberg.com/news/articles/2021-04-22/thailand-lays-out-bold-ev-plan-wants-all-electric-cars-by-2035

    3 https://www.chiangraitimes.com/thailand-national-news/auto/how-thailand-has-become-the-detroit-of-asia/

    4 https://www.chiangraitimes.com/thailand-national-news/auto/how-thailand-has-become-the-detroit-of-asia/

    5 https://www.reuters.com/business/autos-transportation/thailands-booming-autos-exports-help-plug-gaping-tourism-hole-2021-06-29/

    6 https://www.bloomberg.com/news/articles/2021-04-22/thailand-lays-out-bold-ev-plan-wants-all-electric-cars-by-2035

    7 https://paultan.org/2021/05/18/thailand-reveals-its-ev-roadmap-three-phase-plan-into-2030-30-of-local-production-to-be-evs-by-then/

    8 https://paultan.org/2021/05/18/thailand-reveals-its-ev-roadmap-three-phase-plan-into-2030-30-of-local-production-to-be-evs-by-then/

    9 https://paultan.org/2021/05/18/thailand-reveals-its-ev-roadmap-three-phase-plan-into-2030-30-of-local-production-to-be-evs-by-then/

    10 https://www.bloomberg.com/news/articles/2021-04-22/thailand-lays-out-bold-ev-plan-wants-all-electric-cars-by-2035

    11 https://www.lexology.com/library/detail.aspx?g=c26243f5-5918-4dcb-830f-978ac6264214

    12 https://www.lexology.com/library/detail.aspx?g=c26243f5-5918-4dcb-830f-978ac6264214

    13 https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/strategy/sea-strategy-operations-full-speed-ahead-report.pdf

    14 https://www.bloomberg.com/news/articles/2021-04-22/thailand-lays-out-bold-ev-plan-wants-all-electric-cars-by-2035

    15 https://www.lexology.com/library/detail.aspx?g=c26243f5-5918-4dcb-830f-978ac6264214

    16 https://www.taiwannews.com.tw/en/news/4270103

    17 https://focustaiwan.tw/business/202108120023

    18 https://www.lexology.com/library/detail.aspx?g=c26243f5-5918-4dcb-830f-978ac6264214

    19 https://www.lexology.com/library/detail.aspx?g=c26243f5-5918-4dcb-830f-978ac6264214

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