Thai­land is tak­ing steps in be­com­ing the re­gional leader in elec­tric ve­hi­cles .

Thai­land is tak­ing steps in be­com­ing the re­gional leader in elec­tric ve­hi­cles

Norway-Asia Business Review - - Contents - HENRI VIIRALT

Last year, the global elec­tric ve­hi­cle (EV) stock sur­passed 2 mil­lion cars af­ter cross­ing the 1 mil­lion unit thresh­old in 2015. Ac­cord­ing to re­search by the In­ter­na­tional En­ergy Agency (IEA), Nor­way has in­con­testably achieved the most suc­cess­ful de­ploy­ment of elec­tric cars in terms of mar­ket share, glob­ally. It is fol­lowed by the Nether­lands, with a 6.4% elec­tric car mar­ket share, and Swe­den with 3.4%. China, France and the United King­dom all are trail­ing with mar­ket shares close to 1.5%.

De­spite the up­take of EVs, the cold hard truth is that they still cor­re­spond to a mere 0.2% of the to­tal num­ber of pas­sen­ger light-duty ve­hi­cles in cir­cu­la­tion world­wide, and that the cur­rent elec­tric car mar­ket sit­u­a­tion is largely in­flu­enced by the pol­icy en­vi­ron­ment.

Thai­land, also known as The Detroit of Asia for its mas­sive au­to­mo­tive man­u­fac­tur­ing base, has set its sights on be­com­ing ASEAN’s lead­ing EV hub and main pro­duc­tion base, thanks the Thai gov­ern­ment’s pledge to put 1.2 mil­lion elec­tric cars on do­mes­tic roads by 2036.

The gov­ern­ment’s main driver to in­crease de­mand and de­velop the nec­es­sary ecosys­tem to make EVs vi­able in the king­dom is the Board of In­vest­ment (BOI), which re­cently have launched new schemes to pro­mote elec­tric cars through var­i­ous tax in­cen­tives to spur growth in not only ve­hi­cle man­u­fac­tur­ing and im­port, but also EV part man­u­fac­tur­ing and assem­bly, as well as de­vel­op­ing a na­tion­wide grid of charg­ing sta­tions.

“The rea­son why Thai­land is sup­port­ing EVs is quite ob­vi­ous – we all of us are re­spon­si­ble for cli­mate change, and the world is slowly but surely mov­ing to­wards EVs. Since the au­to­mo­tive in­dus­try plays such a vi­tal role in the Thai econ­omy, we are in a unique po­si­tion to take the lead in ASEAN,” says Duang­jai Asawach­in­ta­chit, BOI’s Sec­re­tary Gen­eral.

She ex­plains that as part of “Thai­land 4.0”, the gov­ern­ment’s new eco­nomic model aimed at de­mol­ish­ing the mid­dle-in­come trap and mov­ing into the high-in­come range, there are ten tar­geted or “s-curve in­dus­tries” that have been iden­ti­fied as the driv­ers for the “next phase of Thai­land’s in­dus­trial de­vel­op­ment”, which in­clude nextgen­er­a­tion cars, smart elec­tron­ics, af­flu­ent, med­i­cal and well­ness tourism, agriculture and biotech­nol­ogy, food, robotics for in­dus­try, lo­gis­tics and avi­a­tion, bio­fu­els and bio­chem­i­cal, dig­i­tal and med­i­cal ser­vices.

For EVs, the ap­proved tax in­cen­tives cover the pro­duc­tion of three types of elec­tric cars and their parts in Thai­land, in­clud­ing hy­brid elec­tric ve­hi­cles, plug-in hy­brid elec­tric ve­hi­cles, and bat­tery elec­tric ve­hi­cles, with each of them en­ti­tled to a dif­fer­ent tax in­cen­tive pack­age.

“BOI has been hard at work with other re­lated agen­cies to fi­nally come up with a pol­icy, com­pris­ing a set of mea­sures to launch the EV in­dus­try in Thai­land. These mea­sures cover a range of EV prod­ucts, in­clud­ing tran­si­tional tech­nolo­gies, such as hy­brid and plugin EVs. It’s be­cause we also have to be re­al­is­tic and un­der­stand that in or­der for EV to re­ally take off in Thai­land, it needs proper in­fra­struc­ture, in­clud­ing na­tion­wide charg­ing sta­tions, and this de­vel­op­ment will take time in or­der for us to reach the sta­tus of where Nor­way is to­day. Apart from the lo­cal mar­ket, we aim to be a re­gional pro­duc­tion hub of EVs and con­tinue to be a lead­ing re­gional player in the au­to­mo­tive in­dus­try,” Ms Duang­jai adds.

The Min­istry of En­ergy is al­ready im­ple­ment­ing a three-year plan, sub­si­dis­ing the es­tab­lish­ment of a fur­ther 150 charg­ing sta­tions, of­fer­ing fi­nan­cial as­sis­tance to the pri­vate sec­tor to help carry the torch. Also, Thai­land’s lit­tle­known En­ergy Ab­so­lute Plc has re­cently un­veiled plans to es­tab­lish and op­er­ate 1,000 EV charg­ing sta­tions by end of 2018,

with a pro­jected in­vest­ment of THB 600 mil­lion.

An­other mile­stone that will cer­tainly help the gov­ern­ment to achieve its vi­sion of be­com­ing the re­gional EV hub, has been the open­ing of the Tech­nol­ogy and Innovation Learn­ing Cen­ter for Elec­tric Ve­hi­cles in June 2017. The cen­tre was launched to tackle two ob­jec­tives: de­vel­op­ment of EV tech­nol­ogy, as well as act­ing as the learn­ing cen­tre for all stake­hold­ers, in­clud­ing en­trepreneurs, gov­ern­ment of­fi­cials and the gen­eral public.

“Even in Europe, it has taken a long time for EV to de­velop and there is cer­tainly still room to grow if you look at the num­bers. In Thai­land, it’s kind of a chicken and egg sce­nario – whether you en­cour­age de­mand first and then de­velop the in­fra­struc­ture, or vice versa. In­stead of wait­ing for the public to catch up, and the gov­ern­ment per­haps needs to take the lead to tran­si­tion into EVs,” Ms Duang­jai says.

The first step, she says, is to in­tro­duce EV to the public sec­tor in­cludes public trans­port projects, such as buses and Thai­land’s vi­brant tuk tuks. Cur­rently there is an on­go­ing pi­lot test of 200 elec­tric and diesel­hy­brid buses run­ning on the 137-bus route by the Min­istry of Trans­port, and some univer­sity cam­puses, in­clud­ing Chu­la­longkorn, are us­ing EV for their public trans­port.

When it comes to the po­ten­tial size of the mar­ket, Ms Duang­jai re­mains cau­tious.

“It’s ex­tremely dif­fi­cult to pre­dict with any mea­sure of ac­cu­racy how big the EV mar­ket could po­ten­tially grow since it largely de­pends on how quickly we can get the in­fra­struc­ture in place, along with a num­ber of other fac­tors and the level of col­lab­o­ra­tion be­tween the rel­e­vant agen­cies. EV is still a very new prod­uct in Thai­land, and this is the key rea­son why we’re of­fer­ing in­cen­tives to EV mak­ers to test the mar­ket first.”

Re­gard­less of all of the tax in­cen­tives that the gov­ern­ment can of­fer, one of the key fac­tors will un­doubt­edly be whether the car man­u­fac­tur­ers them­selves will find ways to cut costs on EVs. Data from LMC Au­to­mo­tive re­veals that hy­brid car sales in Thai­land dur­ing 2015 ac­counted for a mere 1% of to­tal cars sold, the same level as in 2012. What this un­der­lines is that de­spite the avail­abil­ity of im­ported hy­brid or plug-in hy­brid ve­hi­cle stock, the de­mand is sim­ply not there and the low sales fig­ures can be at­trib­uted to the pre­mium prices for EVs com­pared to con­ven­tional cars.

To help de­velop new EV tech­nolo­gies and push innovation that will even­tu­ally make it more af­ford­able, Ms Duang­jai in­vites any in­ter­ested Nor­we­gian com­pa­nies to con­sider Thai­land for ex­pan­sion.

“Nor­we­gians are not ma­jor play­ers in EV pro­duc­tion, but there is a lot of ex­per­tise and ex­pe­ri­ence in deal­ing with the en­vi­ron­men­tal is­sues, so there’s def­i­nitely a lot to learn. We are of­fer­ing not only very gen­er­ous gov­ern­ment poli­cies, but a lot of sup­port as well. If we’re talk­ing about the au­to­mo­tive in­dus­try, Thai­land has an ex­ten­sive sup­ply chain and its ef­fi­ciency is very im­por­tant to the gov­ern­ment. That’s why we have man­aged to at­tract a lot of part mak­ers and key sup­pli­ers. Just look at the list of Top 100 au­to­mo­tive parts sup­pli­ers in the world – more than half of them al­ready have man­u­fac­tur­ing fa­cil­i­ties in Thai­land.”

Tak­ing a broader view of the Thai­land 4.0 ar­eas of in­ter­est, Ms Duang­jai has also iden­ti­fied the dig­i­tal econ­omy as a ba­sis for col­lab­o­rat­ing with the Nordic coun­tries. She says there are al­ready some soft­ware de­vel­op­ment com­pa­nies with op­er­a­tions in Thai­land.

An­other s-curve in­dus­try that Thai­land is tar­get­ing is bio­chem­i­cal, and Ms Duang­jai notes the Nordics are among the best in the world when it comes to mak­ing the most ef­fec­tive use of biomass, of which there is plenty of in Thai­land, and she hopes that some Nordic com­pa­nies would be in­ter­ested in set­ting up bio-re­finer­ies in the king­dom.

“My mes­sage to any Nor­we­gian or Nordic com­pa­nies that are in­ter­ested in do­ing busi­ness in Thai­land is that they are most wel­come to con­tact BOI di­rectly, ei­ther in our head­quar­ters here in Bangkok, or our of­fice in Stock­holm which cov­ers all the Nordic coun­tries. Ad­di­tion­ally, we are do­ing road shows in the Nordics on a reg­u­lar ba­sis in or­der to talk to the com­pa­nies di­rectly. If there are any com­pa­nies that have ac­tiv­i­ties in the ar­eas that would be el­i­gi­ble for BOI as­sis­tance, we can cer­tainly fa­cil­i­tate open­ing a di­a­logue.”



Above left: Newly ap­pointed Sec­re­tary Gen­eral of Thai­land Board of In­vest­ment, Duang­jai Asawach­in­ta­chit. Above: The Tesla Model S on a road in Nor­way. Nor­way is a world leader in the use of elec­tri­cal ve­hi­cles.

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