There’s a long, bumpy ride ahead for the government, automotive industry and consumers once the electric-car revolution ignites
One of the key policy challenges for the next government will be in drawing a road map for electric mobility, in keeping with the global shift to the more environmentally friendly form of transportation.
According to forecasts by ABB and other multinational companies, “e-mobility” is likely to be widely available sooner than previously projected, due largely to the declining cost of more powerful batteries. This in turn would significantly bring down the price of electric vehicles (EVs). One forecast suggests that, by 2023-24, the cost of an EV could be on par with that of the average combustion-engine vehicle. If so, it would accelerate the adoption rate of EVs worldwide.
For Thailand, there are multiple consequences. We have a huge automotive industry, largely dominated by Japanese-owned factories. It will need to take on the fresh challenges posed by the disruptive EV and e-mobility technology. Automakers established here, including European, share a combined production capacity above two million units per year. All of these players have been evaluating possible responses to the challenges ahead.
Since EVs and electric-mobility choices have the potential to upend the establishment, many companies are still cautious and prefer incremental changes, while the government is finding it difficult to move fast policy-wise to take on disruptive changes. However, time is running out and Thailand needs to come up with a more credible roadmap in preparing its huge auto and automotive-parts industry for the biggest-ever changes in its history.
The transition from combustion-engine to electric vehicles is looming with challenges for both consumers and manufacturers. For consumers, tax credits and other incentives are needed in the initial stage to make EVs more affordable. For example, the current retail price of a decent EV, at Bt1.9 million, is still out of reach for most consumers. An effective tax structure for manufacturers is also crucial to encourage a new capital investment for EV transition.
EVs and other electric mobility devices such as e-buses and e-motorbikes will play a major role in addressing the PM2.5 air pollution in Bangkok and other big cities that made headlines news early this year. These represent the long-term solution to the air-quality issue, which will only worsen next year due to the continuing rise in the number of combustion-engine vehicles, buses and motorbikes on the streets of Bangkok and other major provincial cities. So far, the government has failed to advocate more affordable choice of electric motorbikes, buses and other “green” vehicles, including electric public buses, for consumers.
Regarding the energy sector, the government also has to prepare for a jump in electricity demand in the national power grid once demand for EVs takes off. EVs, electric public buses and other electric modes of transportation, which have zero emissions, will lead to a 10-15 per cent increase of the world’s electricity demand in the next 1-2 decades. Thailand’s power grid will also undergo changes as a result of more renewable energies such as solar and wind power in the energy mix. The challenge includes the management of intermittent power supply.