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30 May 2023


Despite accelerating BEV investment in Thailand, production of BEV components is seen across other countries (Current Issue No.3414 Full Ed.)


        Although investment in the production of battery electric vehicles (BEVs) in Thailand is projected to grow steadily, KResearch is of the view that there are risks seen in the production of some BEV components, especially those with higher costs, within the BEV supply chain here as carmakers are set to diversify related investment to other countries before importing them for assembling BEVs in Thailand.
        Additionally, increased competition in the BEV market has prompted carmakers to cut the BEV component production costs by manufacturing them in lower-cost countries instead of Thailand. Moreover, there is no minimum local content requirement to produce BEVs for sale in Thailand, while the local content requirement for BEV exports under Thailand’s FTAs with other countries is at 40 percent. For these reasons, carmakers will likely import more BEV components from lower-cost production bases instead of producing them in Thailand.
        During the initial phase before 2025, BEV makers may focus on importing all components from their major production bases. Once they can manufacture more BEVs in Thailand, they may begin investing in the production of some components here although core technologies will still be imported from other countries. Some costlier BEV components will also be imported from other ASEAN nations, including battery cells from Indonesia, and components of electric systems and electronics from Malaysia and Vietnam. As a result, the auto-part supply chain in ASEAN will likely be transformed from that seen today when Thailand is traditionally both a major manufacturing and exporting country of internal combustion engine vehicles.
        However, as BEV production technologies will continue to advance and competition to attract investment in BEV components is at an initial stage, the government’s comprehensive policies, aimed at supporting the BEV industry, is imperative in attracting more investment to Thailand.

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