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9 Oct 2023

Industry

BEV sales in Thailand are set to accelerate in contrast to total car sales by 2023 and 2024 (Current Issue No.3437)

คะแนนเฉลี่ย

        Although the overall automotive market in Thailand is facing numerous challenges, particularly more stringent lending criteria, it is expected that sales of battery electric vehicles (BEVs) are set to increase substantially by 2023 and 2024, led by passenger BEVs, thanks to the EV 3.0 measures that have induced various carmakers to invest and tap into the Thai market. However, whether domestic BEV sales in 2024 will surpass those projected for 2023 may rest with many factors, particularly the EV 3.5 measures.
        The year 2023 is considered to be a year of substantial growth for the Thai BEV market, driven primarily by the EV 3.0 package implemented in 2022 that has helped induce carmakers to invest and introduce their BEVs in Thailand. KResearch thus projects that domestic BEV sales in 2023 will reach up to 68,0000 units, an increase of 405 percent YoY, accounting for 8.6 percent of Thailand’s total car sales. In 2024, a gradual entry of new BEV manufacturers in Thailand will likely help reinvigorate the market, with the total sales projected to reach 85,000 units in the bast-case scenario. Although the BEV share of the Thai automotive market is projected to increase to 10 percent, its growth may fall 25 percent YoY, pending clarity of the government policies, particularly details of the EV 3.5 measures and the timing of their implementation. If the government policies remain unclear, BEV sales will substantially be affected during 1Q24. Nevertheless, if the government decides to implement the EV 3.5 measures in early 2024 and their conditions continue to induce BEV makers to market their products here, it is expected that domestic BEV sales in 2024 will surpass our prior estimate. Preliminarily, KResearch is of the view that domestic BEV sales may reach 100,000 units during 2024, an increase of 47 percent YoY, in the best-case scenario.   

        Meanwhile, it is expected that the domestic passenger BEV market will thrive ahead. For 2023, the share of passenger BEVs is projected to increase to 17 percent of the total passenger car sales, then to 21 percent in 2024. Over the next 1-2 years, passenger BEVs, with a price tag of THB1 million and higher, will likely be most sought as compared to other types of passenger cars, as seen from the fact that additional carmakers have begun to penetrate this market. Presently, roughly 60 percent of the total passenger BEVs sold in Thailand are in this price range. Most BEV buyers tend to have high purchasing power, including those opting to purchase a BEV as their second car. Companies and taxi service providers have also increasingly switched to BEVs. Looking ahead, passenger BEVs costing less than THB1 million have the potential to gain more share of the market when the related ecosystem in Thailand has improved and consumers have increased confidence and begun purchasing a BEV as their first car.
        Although BEV sales in Thailand are projected to accelerate, economic issues in the country, especially hefty household debt and the fact that financial institutions have begun to tighten their lending criteria, have led KResearch to project that domestic car sales in 2023 will contract 6.0 percent YoY to 795,000 units (during 8M23, total car sales reached only 524,784 units, a contraction of 6.0 percent YoY), before growing to 810,000 units or an increase of 2 percent YoY in 2024, supported by the government’s economic stimulus measures.
        Looking ahead, although BEV sales are projected to record substantial growth, thanks to the proactive marketing campaigns launched by BEV makers, their attractive prices as a result of government support, and outstanding car body features, close attention must be paid to a number of issues. These include the fact that the number of public charging points may not increase in line with the BEV sales, representing another restriction to bolster sales within the mass market in the future. To help support steady growth in the BEV market, the government must place priority on offering incentives for the expansion of charging stations as EV batteries used in Thailand have yet been developed for long-distance travelling and fast charging.

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