Thailand Speeding Up EVs

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Following on from the SMMT Webinar focusing on automotive in Thailand, December’s SMMT International Newsletter features guest writer Chanin Khaochan from the Thailand Board of Investment.

Amid the rising adoption of cleaner cars around the globe, Thailand, Southeast Asia’s largest automotive production hub, is counting on its strong foundation in the automotive and support sectors, as well as on its strategic location, capable workforce and comprehensive investment incentives to attract car makers investment in EV manufacturing.

To continue its legacy as the world’s 11th largest automotive producer in 2020, Thailand welcomes investment at every level of the supply chain related to the production of EVs.

 

Why manufacture EVs in Thailand?

Efficient Supply Chain

Thailand has a long-established automotive production value chain that can offer the industry with top-notch quality product at a competitive cost. The country is home to over 35 automobile and motorcycle international brands. The 3,042,393 units of vehicles produced in Thailand in 2020, one-third of that total, or 1,054,880 units, was exported around the world. Breaking down the industry into different stages of production, Thailand has more than 1,800 companies in the upstream industry, 1,100 Tier-2 and -3 suppliers, 720 Tier-1 auto parts suppliers.

Consistent with the “[email protected]” global collaboration which countries aim to reduce greenhouse gases, the Thai government has set the target of having the EVs about 725,000 units by 2030, so Thailand very much welcomes and supports investment in all areas of the EV and automotive supply chain. Nonetheless, as EV development and production requires a whole new set of expertise and capacity, the emphasis is on investment in EV assembly and key parts such as battery, battery management system (BMS) and driving control unit (DCU). A successful venture in any of the said EV components requires the kind of the country strong pre-existing supporting industry especially electronic-related production. With a long-standing presence of electronics industry, Thailand offer a complete supply chain and is ready to provide any electronics materials and parts support to the EV production.

 

Strategic Location and Connectivity

Thailand positions the 1st top automotive exporter of the region and its ability to export is enhanced by its strategic location at the heart of ASEAN, a market of over 600 million consumers, and Asia. Its airports, seaports, highways, and rapidly expanding rail network enable the capital Bangkok and the nearby industrial heartland known as the Eastern Economic Corridor (EEC), home to factories of most leading car makers and components, to support the creation, development, and scaling of innovations in the EV and other advanced industries and to serve as the technological hubs to the region.

 

Capable Workforce

As a well-established automotive hub in ASEAN, Thailand benefits from the in-depth knowhow of many qualified academies and international business associations collaborating on the study of EV technology. These academies engage in collaborative programs with international experts such as RWTH Aachen University of Germany and the Joint Graduate School of Energy and Environment (JGSEE) program to produce a high-quality workforce for the industry comprised of MSc. and Ph.D. graduates.

Thailand also offers the SMART Visa program to encourage highly skilled professionals and investors to accelerate the development of the country’s targeted industries including EV by exempting them from work permit requirements and providing them with special additional privileges. The Thailand Board of Investment (BOI) also facilitates the entry and sojourn of expats and their families and provides very efficient services related to visas and work permits.

In terms of skills readiness, Thailand has a large pool of human resources. Currently, there were over 125,000 vocational graduates, 237,597 engineers with industrial, technical, electronic and mechatronic backgrounds and 222,130 graduates in science and technology. The new graduates compounded with existing skilled and experienced workforce will help to enhance the extended development and productivity of EV industry.

 

What are the support measures provided by the government?

Attractive Investment Incentive Package

The BOI approved a new comprehensive package covering all major aspects of the EV supply chain, with a focus on battery electric vehicles (BEVs), local production of critical parts, and the inclusion of commercial vehicles of all sizes as well as electric boats.

Qualified projects with a total investment package worth at least 5 billion baht will be granted
8-year tax holidays for BEVs and will be extendable in case of R&D investment. The production of critical parts to support the readiness and competitiveness of EV supply chain will be granted the same high incentives as EV with 8 years corporate tax exemption.

 

Strong Innovation Support

The Ministry of Higher Education, Science, Research and Innovation, The Electrical Vehicle Association of Thailand (EVAT) and science and engineering academic institutions have joined forces to form the Thailand Energy Storage Technology Alliance (TESTA) with the common aim of driving progress in local energy storage technology, which is key for electric transportation and a clean energy industry ecosystem, by Innovation Fund providing financial support for R&D activity.

Thailand has developed the Eastern Economic Corridor of Innovation (EECi) and Digital Park Thailand (EECd), a hub linking global innovation and investment as well as introduced 5G technology to facilitate BEV R&D. Investors are enable to utilize infrastructure and innovation ecosystem to adapt technology to local conditions before investing in Thailand.

 

How can we accelerate the growth of the EV sector?

The growth of the EV ecosystem requires sufficient charging infrastructure and apparatus, an area on which the Thai government places great emphasis. Through both public and private sector, Thailand has been able to ramp up its readiness with a total of 2,224 charging units as of June 2021 and the government are also targeting 36,500 charging units in 2035. In addition, the investment incentive for electric vehicle production includes the production of BEV platforms to reduce production costs and encourage demand for EVs as a new car.

The Thai government’s National Electric Vehicle Policy Committee targets having EVs account for 30% of all car sales in Thailand by 2030, with a strong focus on pure-battery electric vehicle which equates to 750,000 out of 2.5 million cars manufactured. This will be achieved through both demand stimulus aimed to incentivize private purchase and by the government transitioning its own fleet.

 

This outlook cements Thailand’s position as a significant EV investment hub in ASEAN and will enable the country to meet its targets for greenhouse gas reductions and the development of its BEV ecosystem while responding to the global Bio-Circular-Green development trend for sustainability.

 

Mr Chanin Khaochan

Deputy Secretary General for the Thailand Board of Investment

The post Thailand Speeding Up EVs appeared first on SMMT.

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