Do Not Ignore Incentives For Hybrid Vehicles
Thailand BOI giving high incentives for EV manufacturers and much less for hybrid vehicle manufacturers….. why?
Wait for it ….. we will be seeing more Japanese and European hybrids in the coming years in our car showrooms or will we see more Chinese brand hybrids?
This is the question that is being raised right now as ASEAN car manufacturing factories see a change in manufacturing direction.
The electric car ‘charge’ might be slowing down in favor of hybrids which have been the limelight of European and Japanese car manufacturers, however the worry is the possible very fast turnaround for Chinese EV manufacturer to move into the hybrid technology as we have seen by BYD recently.
Reuters recently reported that Thailand will introduce investment incentives for manufacturers of hybrid vehicles, its Board of Investment (BOI) issued a statement earlier this month, with excise taxes for hybrids to be lowered from 2028 to 2032.
Thailand has for decades been a regional center for auto production and an export base for some of the world’s top carmakers, including Toyota (7203.T), opens new tab and Honda (7267.T), opens new tab.
Recent investments from Chinese electric vehicle makers like BYD, opens new tab and Great Wall Motor, opens new tab has shaken up the industry and Thailand has been active in offering incentives to court more firms. Excise taxes will be lowered in five years for hybrid vehicles makers that invest at least 3 billion baht in the next four years and include the use of local parts, the BOI said.
Vehicles will also need to have advanced driver-assistance systems to qualify. Seven automakers are currently receiving benefits from incentives offered by the BOI, Narit said, four of those from Japan and three from China.
In March, Neta Auto commenced mass production of EVs at its first Thai factory, which has an annual production capacity of 20,000 vehicles. In February, GAC Aion started construction of an EV factory in Thailand that will have capacity for producing 50,000 units per year.
The plant will be built in two phases; the first phase is scheduled for completion in July 2024. In January, Great Wall Motor started mass production of GWM Ora 03 in Thailand. This marked the first time the Chinese OEM mass-produced an EV outside of China.
Additionally, Changan Automobile is building an EV factory in the country that is expected to begin operations in 2025 with an initial capacity of 100,000 units per year. Automakers such as BYD and SAIC are also ramping up production capacity for EVs in Thailand.
Besides having the potential for becoming an EV production and export hub in the future, the rising sales of Chinese vehicle brands in Thailand seems to be a major factor behind the investments.
Meanwhile, according to a report by Thailand Business News, models from mainland Chinese automakers accounted for nearly 80 percent of the EV market in 2023.
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