In the latest news, BYD and Great Wall Motor have agreed to invest $1.4 billion to build a new electric vehicle (EV) production and assembly plant in Thailand. The move is part of Chinese automakers' efforts to increase investment in Thailand, particularly in the Bangkok area, in order to expand sales in the domestic market and increase international exports of electric vehicles.
Meanwhile, Chery Automobile China is also developing a factory in Thailand to produce vehicles for both the domestic and export markets. According to Thailand's Board of Investment (BOI) on 22 April, Chery plans to produce 50,000 units of electric and hybrid vehicles by 2025. Chery is the third largest car manufacturer in China and is state-owned.
Thailand has been dubbed "Detroit Asia" due to its well-established automotive manufacturing industry. Leading manufacturers such as Toyota, Isuzu, Mitsubishi, Honda, Ford and others dominate the growing domestic market, especially for conventional vehicles powered by petrol, diesel or LPG.
With an annual production of 2.5 million units, Thailand is the leading exporter of vehicles in Southeast Asia. Projections indicate that this production figure will continue to rise, along with China's increasing EV production facilities in Thailand, supporting exports throughout the region.
In Thailand, there has been a significant increase in the registration of electric vehicles, which has more than quadrupled to almost 90,000 units per year. This represents around 10% of total vehicle sales in the country, comparable to sales levels in the United States. This is a remarkable fact. Especially when you consider that overall vehicle sales in Thailand are expected to decline between 2022 and 2023.
Rapid sales growth has been driven by new subsidies and reductions in import/export taxes, as well as the growing presence of Chinese carmakers. Chinese companies now dominate more than half of the market, and their presence could become even more dominant with BYD's plan to begin EV production in Thailand in 2024 with a capacity of 150,000 vehicles per year.
China's EV sector has significant advantages with the Shenzhen seaport in the southeast providing access to various high-tech components such as precision sensors, computer chips, batteries and other hardware.
Thailand aims to become a major EV manufacturing hub for both domestic and export markets. The country aims to attract $28 billion in foreign investment over the next four years, supported by special incentives to encourage investment.
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