Greater government incentives are needed to lower EV prices and spur more purchases
There are millions of vehicles in Thailand, and due to their internal combustion engines, they contribute to air and noise pollution. Electric cars are a cleaner option for Thai roads, but there are still hurdles that need to be cleared before we can move into high gear.
High prices are one major problem discouraging general motorists from purchasing electric vehicles (EVs). Overseas prices of popular electric cars range from less than Bt1 million to slightly over Bt1.5 million. With import and excise taxes, much higher retail prices are to be expected in the Thai market.
The government has trimmed taxes on imported EVs to as low as zero for those coming from China, with which we have a free-trade agreement. State incentives have been offered to importers and manufacturers of EVs, including lower import and excise duties, tax exemption for machinery and materials used in their production, and exemption from corporate taxes for manufacturers. But these measures are still insufficient to lure people into buying electric cars.
The government should offer more attractive incentives to get consumers purchasing electric cars – not only tax cuts or financial benefits but also privileges such as free parking or free tolls, as is the case in some European countries, like Norway. Also, it is a good idea to have electric vehicles locally manufactured and assembled, which would help bring down the prices and make EVs a more attractive alternative for consumers.
In fact, even at the global level, electric cars are still far from popular. Last year, global sales of plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV) accounted for only 1 per cent of total passenger-vehicle sales. However, in six years, sales of EVs are expected to grow more than 30 per cent.
Sales of PHEVs are predicted to grow from 700,000 cars in 2017 to 1.8 million in 2020 and 3.6 million in 2023, while sales of BEVs are seen increasing from 400,000 cars in 2017 to 1.5 million in 2020 and 2.8 million in 2023, according to an industry analysis. Leading manufacturers like Volkswagen, Mercedes Benz, Volvo, BMW, Jaguar and Tesla plan to produce dozens of electric-car models by 2025.
The Ministry of Energy’s Energy Policy and Planning Office has forecast a major expansion in the Thai EV market in the next 15 to 20 years, thanks to government incentives. Local sales of EVs are predicted to grow from 9,000 this year to 406,000 in 2028 and 1.2 million in 2036. That last figure could be higher with more attractive incentives for prospective buyers.
To really help the environment, the fully electric BEVs should be favoured. This kind of car needs no engine or fuel tank because they run entirely on electricity, while other types of EVs, even PHEVs, still have an engine and a fuel tank. A typical BEV has fewer than 50 parts, compared to more than 2,000 for a car with an internal combustion engine. Also, with no engine, it makes no noise, and there are no exhaust fumes from internal combustion.
Regarding concerns about running out of power while driving long distances, the government should encourage private firms to set up charging stations everywhere in the provinces. But there must be guidelines and requirements to control the quality and standards. Thanks to improved technology, EV batteries can now store more power for a longer period.
Petroleum giant PTT Group is shifting towards electric cars. It is considering becoming a dealer for EVs and making batteries to power EVs. The government, as a major shareholder in the company, should be encouraging this shift to steer Thailand towards a future with less pollution. At present, the world is turning towards electricity, and away from petroleum.