On March 24, 2021, the National Electric Vehicle Policy Committee set a new target for Thailand's electric vehicle production, with the objective of promoting the country to become one of the world's important production bases for zero-emission vehicles (ZEVs). Under this challenging target, 100 percent of Thailand's total vehicle production will be ZEVs by 2035. We at KResearch are of the view that the move by the National Electric Vehicle Policy Committee will substantially help create clearer operational guidelines for the relevant sectors, attract a fair amount of future investment in ZEV production and pave the way for Thailand to become one of the world's major ZEV production hubs.
For Thailand to achieve that target and maintain its status as an automotive production center for the region, KResearch, however, is of the view that two important conditions must be met: 1) The relevant public and private sectors may have to ensure that the ZEV markets at home and abroad are large enough. For the domestic market, they must promote pricing competition, build confidence in prospective ZEV buyers regarding EV charging facilities and offer incentives for consumers to buy new cars. For overseas markets, the government may need to accelerate its efforts to enter into free trade agreements with countries that will serve as our ZEV markets. In addition, new ZEV product champions must be created such as compact passenger cars and pickups so that it is easier to penetrate overseas markets.
2) Creating an integrated ZEV supply chain in the country. Although is quite difficult for Thailand to attract investment in the production of battery cells, which are key components of ZEVs and can increate added value for the country, Thailand can attract investment in the production of other important ZEV components such as electric motors, inverters, on-board chargers, electric parts and sensors, as well as regenerative braking systems.
As competitors in the global ZEV industry will markedly change and many countries will be vying to become a leader in ZEV production, it is high time for the Thai automotive industry to adjust in order to stay afloat and seize opportunities from this imminent trend.