Thailand's supercharged EV sales poised for a new surge

BYD and BMW, though different in background and target markets, have both selected Thailand as a base for manufacturing electric vehicles (EVs) and advanced batteries. This decision highlights Thailand’s rise as a global hub for battery electric vehicles (BEVs) and hybrid technologies, spurred by government incentives, tax breaks, and subsidies.

On July 4, 2024, BYD opened a Bhatt 32 billion (US$900 million) factory in Rayong’s Eastern Economic Corridor, marking a significant investment by Chinese BEV manufacturers in Thailand. Companies like Great Wall Motor, Hozon New Energy Automobile, SAIC Motor, Chongqing Changan Automobile, GAC Aion, and Chery Automobile have also established or are building factories in the region, underscoring China's growing influence in Thailand's EV sector.

Japan’s Isuzu Motors revealed its first BEV at the March 2024 Bangkok International Motor Show, with plans to produce it in Thailand for export by 2025. Isuzu, alongside Toyota and Honda, is deepening its investment in Thailand, focusing on hybrid and EV production. South Korea’s Hyundai Motor Company has also secured approval to invest 1 billion baht to begin local BEV and battery assembly by 2026. European automakers like Mercedes-Benz and BMW are equally committed, with BMW expanding its operations by launching its first locally produced EVs in late 2025 and building a high-voltage battery plant in Rayong.

Chinese battery maker SVOLT Energy Technology, in partnership with Thai company Banpu Next, began producing EV battery packs in March 2024, further establishing a localised supply chain. In May, Changan partnered with Thai parts manufacturers to produce EVs locally by 2025, enhancing the ecosystem for EV production in Thailand.

A total of 18 clean energy automakers have invested US$2.2 billion in Thailand, a figure expected to grow tenfold by 2027, according to the Thailand Board of Investment (BOI). BMW Manufacturing (Thailand) Managing Director Eric Ruge highlighted the rapid development of the market and the increasing consumer demand for BEVs.

Thailand has traditionally been a leader in the internal combustion engine (ICE) auto industry, ranking 10th globally and first in Southeast Asia in 2023. However, government policies have now positioned Thailand as a frontrunner in the EV sector, surpassing the U.S. and challenging China. The Thai government’s consistent support for BEVs has driven a significant increase in local BEV sales and is contributing to the mass adoption of zero-emission vehicles.

Bloomberg Green analysts identified a 5% market share as the tipping point for EV adoption. Thailand exceeded this with EV sales reaching 12% of all vehicles in 2023 and 14% in the first quarter of 2024. With local production facilities now operational, EV sales are projected to hit 150,000 in 2024, representing a 20% market share, according to the Electric Vehicle Association of Thailand.

Thailand’s “30@30” strategy aims for 30% of vehicle manufacturing to be EVs by 2030, including cars, trucks, and buses. With more than half of Thailand’s 2.5 million vehicle manufacturing capacity intended for export, the country’s role in the global clean energy vehicle supply chain is set to expand.

The International Energy Agency has recognised Thailand’s potential as a major EV manufacturing hub, citing new subsidies, domestic battery manufacturing incentives, and lower taxes as key factors. Chinese carmaker BYD has become a dominant player, capturing a 40% share of the Thai EV market with 30,000 cars sold locally. BYD’s Rayong factory, with an annual capacity of 150,000 vehicles, plays a critical role in its expansion across ASEAN and beyond.

Other Chinese manufacturers like Hozon have also succeeded in Thailand, with the Neta V model becoming a top-selling EV. Hozon’s local factory, with a capacity of 30,000 units annually, plans to export to other markets, while both Great Wall and Hozon utilise batteries from SVOLT’s new Thailand factory.

BMW’s success in Thailand is partly due to the skilled Thai workforce, with their Rayong plant uniquely producing both cars and motorcycles. Thailand’s strategy of attracting foreign automakers and developing a strong local supply chain has been crucial to its rapid transition to BEVs, making it a leader in the global EV market.