ASEAN’s fully-charged EV hub

Thailand Board of Investment (BOI)

Imagine busy urban streets, alive with battery-powered motorcycles, cars and buses, but without the haze of exhaust fumes and the noise of whirring engines. Imagine e-ferries docking quietly at piers and travelling along waterways without emitting hot, black smoke into the air or oil into the water. Imagine cities that are more livable with healthier air and cleaner water. Imagine ASEAN’s fully-charged EV hub.

Thailand is committed to playing a leading role in the global electric transportation revolution and fulfilling its international commitment to greenhouse gas reduction. Indeed, the use of electric vehicles (EVs) has quickly become a practicality in Thailand, where multiple models of EVs from global and local manufacturers have generated great enthusiasm among local car users. They are attracted by the environmentallyfriendly advantages and reasonable prices, which have increased confidence in long-term uses.

Hybrid electric vehicles (HEVs) have already become popular among Thailand’s car users, and the country is projected to see an increase in the number of more intensive battery-fuel vehicle types of plug-in hybrid vehicles (PHEVs) and battery electric vehicles (BEVs) on the road over the next few years. As more of these EVs are being sold, their prices are falling due to a better economy-of-scale, making them an even more appealing alternative to cars with traditional combustion engines. In catering to the vibrant consumer market, this trend also reflects the concrete national framework of promoting usage of, and confidence in EVs by expanding the network of charging facilities as well as developing EV supporting industries.

With EVs considered to be an important first step towards realising the next-generation transportation goals as they seek to leverage digital technology to improve functionality, the Thai government is making efforts to attract significant investment in the EV industry.

Driving the EV ecosystem forward

The National Electronic Vehicles Policy Committee, set up by the government, recently introduced a masterplan which laid out a framework for EV development over a 5-, 10- and 15-year timeframe. The aim is the transformation of the country’s wellestablished automotive supply chain for the production of battery-powered vehicles as well the building of technological capacity for modern mobility.

The main objective of the plan is to establish Thailand as “ASEAN’s centre of excellence” by 2035 in three areas, i.e., zero-emission vehicles, next-generation automotive technology, and innovation in the next-generation business models. Individual goals within the plan relate to EV usage, electricity charging facilities, industry capacity-building, incentives for EV adoption and awareness of next-generation transportation. Leveraging the competitiveness of its skilled workforce and ecosystem in the automotive sector at the global level, the Thai government envisions the country becoming the largest investment hub for EVs in one of the world’s fastest growing economic blocs, the Association of Southeast Asian Nations (ASEAN).

In Thailand’s large automotive supply chain, where more than 2,000 companies operate, 30 global automakers are using the country as their main production base in ASEAN. Thanks to four decades of developing the technical knowhow, labour force, parts production and supporting facilities for the automotive industry, Thailand has established itself as the world’s eleventh-largest automobile production base, with a total output of 2.2 million units in 2020.

The progress being made in EV technology is also creating tremendous new opportunities for local companies to enter the EV market, as it requires assembly methods that differ from those used in the production of fossil fuel-driven combustion engines. In line with the global EV evolution, Thailand’s flourishing EV market sees international and local entrepreneurs undertaking business ventures in a variety of areas, ranging from the manufacturing of passenger and commercial EVs, e-buses, e-motorcycles, electric three-wheelers and electric boats, to the introduction of EV battery plants, charging stations and home-based charging system services as part of the ongoing conversion from combustion engines to EVs.

The progress being made in EV technology is also creating tremendous new opportunities for local companies to enter the EV market, as it requires assembly methods that differ from those used in the production of fossil fuel-driven combustion engines.

BOI incentives reinforce Thailand’s EV vision

The Thailand Board of Investment (BOI) recently introduced comprehensive investment promotion incentives for the EV industry to replace the expired package, with the main focus being on accelerating the development of the BEV ecosystem and building Thailand up as a manufacturing hub for BEVs, including lithium-ion batteries. The promotional package offers the following incentives: • An eight-year CIT exemption for the manufacturing of four-wheel BEVs, plus an additional three-year CIT exemption for the manufacturing of four-wheel PHEVs and

HEVs in addition to BEVs. Further incentives are available if certain requirements are met; • A three-year CIT exemption for the manufacture of electric two-wheelers, three-wheelers, buses and trucks; • A five- to eight-year CIT exemption for battery packaging and the manufacturing of battery modules and cells, and a 90 per cent reduction of import duties for two years on essential materials used in battery production; • An eight-year CIT exemption for 17 key components of EVs, four of which are new categories; • An eight-year CIT exemption for the manufacturing of electric boats.

During 2017-2019, the BOI granted investment incentives to 28 EV manufacturing projects, including 5 HEVs, 7 PHEVs, 14 BEVs and 2 E-Bus projects, with a total investment value of US$ 2,700 million and an annual manufacturing capacity of 570,000 units. In terms of EV parts and batteries, the BOI granted investment incentives to 14 parts and 10 battery manufacturing projects with a total investment value of US$ 350 million.

For further details about the privileges, conditionality and application process, please visit www.boi.go.th

Source: Thailand Investment Review (TIR), Speeding up EVs: Imagine ASEAN’s fully-charged EV hub, vol. 31, No. 2, February 2021. Available at https://www.boi. go.th/index.php?page=monthly_magazine_list_enews &language=en