Thailand seeks auto R&D investment to keep EV momentum going

Isuzu Motors

12/10/2023 10:55

By Devjyot Ghoshal
       BANGKOK, Oct 12 (Reuters) - Thailand will provide
incentives and tax breaks for carmakers setting up electric
vehicle research and development centres, as it seeks to build
on early success as a regional EV frontrunner, a government
official said on Thursday.
    Southeast Asia's second-largest economy is the largest car
producer and exporter in the region, with Japanese manufacturers
including Toyota Motor Corp  7203.T , Isuzu Motors  7202.T  and
Honda Motor  7267.T  dominating the Thai sector for decades.
    Thailand aims to convert about 30% of its annual production
of 2.5 million vehicles into EVs by 2030 and is preparing
incentives to encourage more investment and conversion into EV
manufacturing.
    "Research and development activities are one of our top
priorities because we would like to strengthen our
competitiveness," Narit Therdsteerasukdi, secretary general of
the Thailand Board of Investment, told Reuters, 
    Tax breaks and grants would be given on automakers
committing R&D investment in Thailand, and additional incentives
would be available if they move their regional headquarters to
the country, he said.
    He did not provide details on how much overall support would
be worth.
    Various Chinese carmakers have committed to invest $1.44
billion in new production facilities in Thailand, with BYD
 002594.SZ  investing nearly $500 million to produce 150,000 EVs
a year.
    Its rival, Great Wall Motor  601633.SS , said in May it was
considering setting-up an R&D centre in Thailand that could work
on battery-powered pickup trucks, a mainstay of the Thai auto
market.    
    Japanese automakers including Toyota, Honda, Nissan Motor
 7201.T  and Mitsubishi Motors  7211.T , which already have R&D
centres in Thailand, would be encouraged to work on EVs in the
country, Narit said. 
    "We will support the existing automakers to transition to
EV," he said.
    Spurred by a government subsidy of up to 150,000 baht
($4,100) per vehicle, EVs have enjoyed strong sales in Thailand
this year, accounting for about half of all EV sales in
Southeast Asia in the second quarter of the year.
    The new "EV 3.5 package", which is likely to include a
purchase subsidy slashed to 100,000 baht per vehicle, should be
finalised later year and rolled out by January next year, Narit
said.
    The scheme will cost about 3 billion baht, research firm BMI
said in a note last month.
($1 = 36.2100 baht)

 (Reporting by Devjyot Ghoshal; editing by Robert Birsel)
 ((Devjyot.Ghoshal@thomsonreuters.com;))