Thailand is bracing for an extended EV price war triggered by a surge in local production from Chinese car makers, a move likely to deal a further blow to a domestic auto industry already struggling with tumbling sales, industry experts said.
Electric vehicle sales in Thailand, Southeast Asia’s largest EV market, are forecast to jump 40 per cent this year, exceeding 100,000 units and reversing a 8pc drop in sales last year, Suroj Sangsnit, president of Electric Vehicle Association of Thailand (EVAT), told Reuters.
The expected surge in sales is largely because of a national incentive programme that requires local production of 1.5 vehicles for each imported vehicle between 2022 and 2023 for companies to qualify for tax breaks – and to avoid paying hefty penalties.
The programme, which also includes price subsidies of up to 150,000 baht ($4,400), helped Southeast Asia’s second-largest economy become the region’s biggest EV market, which registered 70,000 new EVs last year. It imported about 84,000 EVs between 2022 and 2023. But it now threatens to intensify bruising price competition in a weak market where auto sales are slumping because of tight credit conditions and ballooning household debt, analysts said.
Great Wall Motor for January, dropped the price of its Ora Good Cat as much as 270,000 baht, while GAC AION lopped 166,000 baht off the price tag of its AION Y Plus. Both are Chinese companies.
“Price wars will be prolonged, aggressive, and more widespread,” said Siam Commercial Bank (SCB) Economic Intelligence Unit senior analyst Tita Phekanonth, adding that there also could be discounts for internal combustion engine vehicles.
Thailand, a major auto production hub in Asia, exports about three-fifths of locally manufactured vehicles. The Board of Investment (BOI), which anchored the incentive programme, changed some of the rules in December – extending a battery production timeline and offering incentives for hybrids – to ease concerns of oversupply and a price war.
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