As climate change increasingly becomes a pressing issue, more and more people are becoming conscious of their carbon footprint — and, in turn, shifting to the use of electric vehicles (EVs).
In fact, the International Energy Agency announced just last April that 3 million electric cars were registered in 2020, a 41% increase from 2019. By the end of the decade, that number is expected to reach 145 million.
Thailand in particular is expected to play a big role in this push, as energy minister Supattanapong Punmeechaow announced that they aimed to sell only EVs out of the country by 2035.
Roadmap to 2030
The EV roadmap revealed by the Ministry of Energy is composed of three phases, which ultimately intend for EVs to make up 30% of the country’s automotive production by 2030. This initiative will be accompanied by incentives for both consumers and manufacturers alike, as natural adoption of EVs might take too long, according to the Electric Vehicle Association of Thailand.
And though EVs currently make up only 1% of all vehicles in Thailand, its small domestic market did not slump in 2020 as compared to its regular auto counterpart. In fact, sales for EV manufacturer MG Motors rose by 7%, with models such as the family-friendly MG ZS EV helping the company hold the market share at 88%.
The roadmap will be driven by a partnership between PTT, a state-owned oil and gas company, and Foxconn, a Taiwanese electronics manufacturer best known for assembling iPhones. The two parties agreed to produce EVs, and their components, for the Thai market, providing cost-effective solutions for car manufacturers.
However, critics see the deal as providing Foxconn with a “shortcut” to enter Thailand’s domestic market, with state promotion intensifying the market situation in the “Detroit of Asia” even further.
Thailand has been manufacturing its own cars for nearly half a century, beginning production in partnership with more established carmakers like Nissan. However, realizing that they were running a trade deficit, the kingdom began promoting local models by restricting imports. And though it took a few decades, some well-timed bilateral agreements and the lifting of restrictions after the 1997 Asian financial crisis helped Thailand become the foremost automotive manufacturer in Southeast Asia.
Today, the country is one of the most dynamic in the region. As this guide to Thailand by Expat Bets points out, its location at the crossroads of East and South Asia has helped Thailand be quite strategic with its growth. Meanwhile, government initiatives such as those in the automotive industry have fostered self-sufficiency in a region where most countries rely on an export-oriented, import-dependent dynamic.
As with all things, however, there are expected to be a few bumps in the road. Though the majority of Thais are concerned about climate change and are impressed by the benefits EVs offer, many are off-put by the high price tag attached to them. Another issue with EVs is the low mileage given by each charge, especially since heavy traffic is common in the kingdom’s urban centers, and the infrastructure for EV chargers is currently few and far between.
Despite this, however, there’s still much room for the EV industry to grow in Thailand. State encouragement, highlighted by its 2030 roadmap, is expected to push manufacturers to ease consumer doubts. And with charging provider Sharge anticipating the local EV charging industry to reach $450 million in value by 2025, this future may be closer than previously imagined.