From cars to tuk-tuks and motorbikes, electric vehicles are becoming more commonplace in Thailand. The country needs to support these efforts while building EV infrastructure.
According to the Land Transport Department, there were 50,347 electric vehicle (EV) registrations in Thailand during the first nine months of 2023 which accounted for 9.7 percent of all new passenger car registrations. It is undoubtedly a far cry from 2018 when only 300 hit the road. The figure also highlights the sector’s growth over the past five years. This progress is positive and can be attributed in part to the Thai government’s incentive programmes.
On the buyer side, discounts have made EVs more accessible. However, it is the scheme for manufacturers of battery electric vehicles (BEV) that has allowed Thailand to take the lead in Southeast Asia.
“The previous government had a policy in place to support the purchase of these that involved subsidies and the lowering of import duties. In order to unlock these, companies had to commit to producing electric vehicles in Thailand,” President of the Electric Vehicle Association of Thailand (EVAT), Mr Krisda Utamote, details. “The bold scheme not seen elsewhere. Some countries in ASEAN offered to lower or remove import duties for EVs but none have combined incentive programs with a commitment to local production. This ensures that the next generation of regional EV production is likely to happen here in Thailand.”
Even though the country may not have access to the raw materials that a country like Indonesia does, Thailand can tap into actual demand and manufacturing capabilities to create a solid foundation even if hurdles remain.
“There is still some EV anxiety in the eyes of the public. People are concerned about if there are enough chargers or what happens when an issue arises. It is an obstacle we must overcome,” Mr Krisda states. “Calls for non-monetary incentives that would encourage individuals buying a new car to go zero emission are being considered as well. These include things like special driving lanes and preferred parking zones. An alternative would be deterrents for purchasing a gas vehicle should also be considered.”
An example would be the implementation of a low emissions zone in the Bangkok city centre requiring non-EV operators to pay a fee to drive in this area. That is an ambitious plan some way off, but those discussions can begin now.
Taxes have been the key topic to consider. Mr Krisda points out that Norway’s sales tax exemption on electric vehicles is something that has driven the market successfully. Similar schemes on tax policies could be reviewed for Thailand as well.
“Thailand can reach its zero-emission vehicle targets set via the National EV policy. That being said, the country can’t assume it will happen without any more work. There is a need to extend current consumer EV initiatives while looking at how the country can better build infrastructure,” Mr Krisda says.
Powering EVs
Getting EVs on the road is one part of a much larger process. These need support from an infrastructure and that means charging stations. Mr Krisda notes the number of Plug-in Hybrid vehicles (PHEVs) and battery electric vehicles (BEVs) combined per public charging socket in Thailand sits at 21 to 1 which is well short of the global average which stands at 15 to 1. Investment in this area will sustain the country’s growing demand.
“The ideal situation is to set the target at around ten EV cars per charger in Thailand, although that will take time. The benefits of doing so could be huge, however. That’s because good infrastructure and convenience can boost demand and stimulate further investment in the sector,” Mr Krisda reports.
Currently, EV charging station operators in Thailand are mostly private companies. What’s more, the charging business doesn’t make a profit and will not for the time being. Investment has come from various companies who understand that disruption is coming and want to be ahead of the game.
He adds, “Profitability for charging stations is the only way to encourage growth and investment in infrastructure. We hope a plan to offer operators incentives, either in the form of tax breaks or other subsidies, is adopted.”
It’s not just EV charging station operators who are facing challenges. The process of charging an EV in Thailand remains fragmented and user-unfriendly. Unlike going to a petrol station and paying cash, people must download apps and pay digitally. The experience can be overwhelming as the country has more than 13 different EV charging station operators.
“Change is coming through a concept called EV roaming. EV charging station operators are working together in the so-called “Charging Consortium” led by EVAT to streamline the system so car owners can pay to use any charging facility through their app of choice. If the charger is not operated by the company a person is paying through, a small roaming fee would be applied,” Mr Krisda says. “The first pilot programme is expected to start in the fourth quarter of 2023 with three operators taking part before expanding to include more next year.”
EV infrastructure isn’t the only area that needs more development. Thailand must work on improving the value chain. Things are being done that must be built upon or made more efficient. Investment in this segment will ensure the commitments from manufacturers to build in the Kingdom can be fulfilled.
“EV manufacturers are committed to Thailand, but nothing can be built without parts. The country must also have the ability to produce the components these vehicles require,” Mr Krisda notes. “Now we are a regional leader in internal combustion engine (ICE) parts, but it is time to pivot toward batteries, electronic drivetrains, and fuel cells.”
More than Cars
Passenger vehicles garner a lot of attention when it comes to the EV sector. In Thailand, that isn’t the only area where the transition is taking place.
“We are seeing a large demand for electric motorbikes. Drivers from rideshare and delivery app Grab have gravitated towards scooters with removable batteries that can be swapped out since they can save a lot of money with this method,” Mr Krisda states. “Meanwhile, electric pickup trucks are an open arena waiting for players to enter. Toyota announced it intends to build Hilux Revo BEV trucks in Thailand, but the market is still wide open despite the widespread use of pickups in the Kingdom.”
Even the black smoke bellowing buses that are a source of much consternation in Bangkok could be phased out. Electric buses have begun making their way onto the crowded streets of the Thai capital. In 2022, there were 900 new registrations with the Bangkok Mass Transit Authority allowing private companies to operate these on certain routes. Mr Krisda believes change is coming but it will take time for the pollution-emitting buses most residents are familiar with to be taken off the roads.
People also play an essential role in the transition. Skilling up and retraining the workforce of Thailand’s automotive sector is something Mr Krisda believes is urgent.
“With so much of the focus still being on ICE activities, those employees need to be retrained so they can contribute to zero-emission vehicle manufacturing. The creation of training and learning programmes are the only way to ensure we have enough skilled workers to keep up with demand,” Mr Krisda says. “It takes time and effort to do this. Ideally, a synergy between the education and private companies to accomplish workforce training goals can be established.”
For EVAT, Norway is seen as a potential partner in the development of the entire EV ecosystem. Everything from policies to infrastructure expansion could be areas where collaboration is possible.
“There are so many things the Thai EV sector can learn from Norway. Both in terms of technical abilities and policy implementation. One thing we are excited to see is how the country achieves its goal to have all new cars sold by 2025 be zero-emission. Additionally, Norwegian companies boast know-how in other areas, such as value chain development. That could be beneficial here,” Mr Krisda concludes.
Fact Box
- There were 50,347 EV registrations in Thailand during the first nine months of 2023
- The previous Thai government offered lower import duties for EV manufacturers that committed to producing electric vehicles in Thailand
- In Thailand, the number of PHEVs and BEVs combined per public charging socket is 21 to 1
- There are more than 13 different EV charging station operators in Thailand
- “Charging Consortium” led by EVAT is expected to a pilot programme in Q4 2023 to streamline charging payments
- The Bangkok Mass Transit Authority has allowed private companies to operate electric busses on certain routes
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