Is the EV sector losing its drive?

Whether the number of locally made electric vehicles (EVs) increases year-on-year remains murky as domestic car sales have slumped since the start of the year.

- LAMONPHET APISITNIRAN

Manufacturers of both internal combustion engine (ICE) vehicles and EVs, especially those from China that invested in Thailand to benefit from the growing EV market, are adjusting their production plans given the sluggish industry here.

Local auto parts manufacturers are bearing the brunt as demand from car assembly plants declines.

The Explainer looks into how EV companies and auto parts makers are dealing with the slump, which shows no signs of abating as Thailand is plagued with high household debt and weak consumer purchasing power.

HOW HAVE EV MANUFACTURERS RESPONDED TO THE GLOOMY MARKET?

EV companies participating in the state's incentive scheme dubbed EV3.0 called on the government to ease requirements to produce such vehicles in Thailand.

Under EV3.0, which was meant to promote battery EV (BEV) consumption and production between 2022 and 2023, EV companies were granted lower excise tax and import duties, as well as subsidies to support their sales, in exchange for a commitment to assemble BEVs locally from 2024.

Authorities provided subsidies of up to 150,000 baht for BEVs priced less than 2 million baht, and up to 18,000 baht for electric motorcycles priced less than 150,000 baht.

Companies beginning to produce BEVs in 2024 are committed to a 1:1 ratio target, meaning they must produce one BEV domestically for every EV they import.

The ratio increases to 1.5 locally produced BEV for each imported BEV if they begin production in 2025.

However, because of the stagnant car market, the National EV Policy Committee resolved last year to relax these conditions at the request of car companies.