The cabinet's approval of a new electric vehicle incentive package, dubbed EV3.5, will boost key targeted S-curve industries the government is promoting and encourage more prospective foreign investors to expand their businesses in Thailand, says the Federation of Thai Industries (FTI).
The 34.1-billion-baht scheme, which covers subsidies, reduced import duties for fully assembled cars and an excise tax cut, received a glowing response from major automakers that are stepping up efforts to grow their EV businesses.
Car companies participating in EV3.5 spanning 2024-2027 are required to start producing EVs domestically from 2026.
"Major EV manufacturers will continue to come to Thailand to invest," said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman of the Automotive Industry Club.
Targeted industries such as smart electronics should grow as a result of greater EV investments, said Mr Surapong.
"Thailand is a major production base for cars with internal combustion engines [ICE]. We believe it should not take a long time for Thailand to be a regional EV hub," he said.
Car buyers will benefit from EV3.5 as prices drop, said Mr Surapong, helping people decide to buy despite high household debt. Domestic car sales have slumped as banks adopt stricter lending criteria to avoid non-performing loans.
Chris Wailes, managing director of Volvo Car Thailand, said Thailand has become a regional leader in EV adoption and the company welcomes EV3.5.
"Volvo is working hard to harmonise the prices of EVs and traditional ICE vehicles, making the decision to switch easier for consumers," he said.
As EV ownership increases, Thailand should promote services such as battery repair and recycling to reduce ownership costs, which reinforces the country's regional position, said Mr Wailes.
Ford Thailand plans to bring EVs to the market at an appropriate time, but ICE truck and pickup passenger vehicles remain a powerful choice for Thai customers, said managing director Ratthakarn Jutasen.
Bangchak Corp plans to expand its EV charging stations as part of its energy transition plan, said chief financial officer Phatpuree Chinkulkitnivat.
The FTI yesterday reported Thailand's car exports in November increased by 13.2% year-on-year to 99,609 units, attributed to a better economy for the country's trading partners. For the first 11 months, exports rose 15.5% year-on-year to 1.02 million units.