Cheaper EVs, cleaner air

Let’s admit it. The car culture of Thai commuters will not go away anytime soon, even though Bangkok’s electric rail networks will see a lot of improvements in the coming years. Vehicles with internal combustion engines will continue to choke the capital, as well as other major cities with toxic airborne pollutants, such as the ultrafine PM2.5 dust. If widely adopted, battery-powered electric vehicles (BEVs) could be a part of the solution to the problem. But the problem is that BEVs only make up a very tiny fraction of all cars on Thai roads. Plus, they are a lot more expensive than their fossil-fuel powered equivalent.

Whereas prices of BEVs are expected to become lower than conventional cars within three years in Europe due to the year-on-year decrease in battery cell prices — in Thailand, electric cars are likely to remain costly for the average Thai buyer.

The government must realise that keeping the prices of environmentally friendly vehicles exorbitantly expensive will not help clean the our in our big cities. At present, there are about 1,500 BEVs across Thailand. This figure is far lower than the approximately 400,000 conventional cars and 20,344 hybrid cars sold in the country last year alone.

The government should implement more drastic measures — not just to promote the local development and production of BEVs, but also to increase competition between car manufacturers, which will ultimately make their prices more competitive when compared to conventional vehicles.

Thailand has been promoting the use of EVs since 2017. The government even announced privileges for investors, with the aim of having 1.2 million BEVs and 690 charging stations on Thai roads by 2036 — but so far, progress has been slow.

Moreover, while the government has been promoting traditional and plug-in hybrids rather than BEVs in order to help prop up the domestic automobile manufacturing sector, prices of these hybrids remain high — often exceeding one million baht per unit. Plus, these hybrids still come with internal combustion engines which run alongside their electric batteries.

While there are several locally made BEVs available in the market, interest from buyers has so far been limited. More models will be available next year, but interest is expected to remain the same as prices will still be high.

Imported BEVs, prices ranging from at least 1.5 million to two million baht, are not an affordable option for the majority of Thai buyers. Their high price is the result of the 80% import tariff on finished cars. This unrealistically high duty has been the state’s policy for more than three decades to protect local manufacturers and workers in the automotive industry.

Car importers have been calling on the government to slash the import tax by half to 40%. While it is understandable that the tax was put in place to safeguard the local industry, a tax reduction may be the right measure to bring in more imported BEVs at lower prices, which would attract more “green” buyers. The lower tax will also promote competition between carmakers and/or importers, which will ultimately lower the price of BEVs.

In the past few years, the Board of Investment has focused on giving privileges to local manufacturers, such as corporate tax exemptions and waiving customs duty on new machinery, as well as incentives for companies to build charging stations.

But without buy-ins from consumers, the wider adoption of 100% electric vehicles will not happen anytime soon. If we want cleaner air, then it’s time to make make BEVs affordable.