EV production hub likely to remain a dream
Government urged to pursue consistent policies to create demand and facilities for electric vehicles. By Post reporters
The government’s policy to push Thailand as a hub and production base for electric vehicles (EVs) in Asean and incentives to prod investment in EV assembly are unlikely to bear fruit, experts say. The directionless policies implemented over the past few years are expected to make the dream of becoming a production base for EVs remain just that, according to analysts and industry officials.
“It is true that high-tech industries such as EVs are a global trend that will be a new engine to help drive the economy,” said Vichai Jirathiyut, president of the Thailand Automotive Institute. “But the policies to pave the way for that should be carefully considered.”
Analysts said the policies to promote EVs in Thailand and to push Thailand as an EV production base in Asean should be made in concordance instead of providing support and promotion without any direction.
The latest government EV promotion is to allow the import of completely built-up (CBU) EVs, which the government said is an attempt to raise consumer awareness and would indirectly help bring forward the dream of becoming an EV hub.
The import of CBU EVs is limited and must comply with the condition that importers have to invest in the domestic production of the same model of the imported EV within the next few years.
This has raised concern among car assemblers and auto parts producers that the import of CBU EVs could hurt those developing the technology to be ready for the EV production hub in the future.
“The plan to import CBU EVs may bring in about 500 EVs to help kick-start the market and create awareness of EVs among consumers,” Mr Vichai said. “However, it is unlikely to help accelerate the plan to promote EV production in Thailand. It is unlikely to make the dream come true even 10 years from now.”
This view was echoed by Siam Commercial Bank’s Economic Intelligence Center (EIC), which said the successful EV market penetration would take a decade.
The EIC said EV sales are minimal, accounting for less than 1% of global car sales in 2015, even though they have been on the market for more than a decade, mainly because of their high prices caused by the cost of batteries.
“Manufacturers still cannot agree on the technology that would best meet consumer demand,” the EIC said. “Costs remain high and more development is needed. Although the government is supporting the manufacturing of EVs, this is only as an alternative for consumers and is not enough.”
However, Deputy Prime Minister Somkid Jatusriputak holds a different view, saying the investment project for EV production will take place quicker than in 10 years because of rising demand and government support.
He said the government has assigned the Board of Investment (BoI) to draft new privileges for those who want to invest in EV production, while the Energy Ministry is drafting a plan to build EV facilities, especially charging stations.
However, the BoI has not yet decided which appropriate privileges would help offset the high cost of EV batteries in order to make EVs affordable and create substantial demand to encourage further investment.
“It is difficult for the BoI to create attractive privileges and relying on such privileges could create a huge burden for the government,” Mr Vichai said. “And the government itself is unlikely to provide a subsidy to lower EV prices and support sales since it requires a huge budget.”
On the development of EV support facilities, the Energy Ministry and PTT Plc together with major carmakers have signed a memorandum of understanding to work together in developing EV charging stations to promote EV usage in the country.
The ministry expects the number of EVs to rise to 1.2 million units by 2036, which would help cut energy consumption by 30% compared to 2010, according to the energy conservation plan.
PTT has four EV charging stations in Bangkok and its outskirts.
However, such a number is far too low to meet demand, especially if the plan to import CBU EVs is implemented over the next few years.
“That means hundreds of charging stations are required as most EV models are designed to go for about 150-200 kilometres on one charge,” Mr Vichai said.
The final question about EVs in Thailand is the mixed response from major car assemblers to the government’s ambitious EV project.
Some car producers agree with the government’s plan to allow the import of CBU EVs, while others say Thailand should gradually develop other hybrid cars.
There are four types of EVs. Hybrid electric vehicles and plug-in hybrid electric vehicles were initially developed with two systems: electricity/petrol, and electricity/ diesel.
Later, battery electric vehicles fuelled purely by electricity were developed.
“The mixed response means car assemblers are producing several hybrid cars. But there is no certain demand for EVs and this means it is not worth the investment,” Mr Vichai said.
Another analyst said Thailand could see hundreds of EVs on the roads of Bangkok as they would become a rich man’s toy if they are finally allowed to be imported in the coming year.
“If we still go on with directionless state support, I think we would need another 10 years to create the market awareness that would lead to real demand before encouraging investment in EVs,” said the analyst, who asked not to be named.