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More support needed for Thai EV market to change gear


Despite a government incentives scheme and the entry of new players offering new electric car models, Thailand’s EV market needs more support to sustain growth and enable widespread adoption of the industry, according to a report. 

ABeam Consulting Thailand, a leading global consulting firm with specialties in digital transformation, highlighted in the report the trends and challenges for the industry in 2022. 

The report said that the adoption rate of EV cars in the country is now accelerating due to better government incentives and new market automakers offering more choices. In 2019, Thailand had only 660 electric cars on the road but in 2021 the number increased to 1,955 and is expected to reach 3,000 this year. 

However, there are more things the government and automotive companies need to do in order the make the country's market strong and sustainable, the report said. 

The Thai government announced new incentives in February 2022 consisting of a package of import and excise duty cuts and direct subsidies. It aims to not only help increase the EV adoption rate but also commit vehicle manufacturers to begin EV production in the country in the near future. 

With new incentives in place, and with signed agreements with several automakers, the country should begin to bridge the gap with other countries, in particular China and European countries that are further ahead in their journey towards an EV future.

 

Supreeda Jirawongsri

Supreeda Jirawongsri, principal, Head of Digital Competency at ABeam Consulting (Thailand) Ltd, said although the overall outlook for EV growth in Thailand was very promising, there were currently some global headwinds, including supply bottlenecks and significantly higher than before raw materials costs, that would block the progress of the Thai EV market.

Industry players must take appropriate actions and adjust their strategies and operations so that they can take advantage of new trends and help accelerate the industry transition, Supreeda said.

ABeam has suggested that automakers and suppliers together build intelligent supply chains utilising Internet of Things, big data, AI and blockchain that increase visibility, optimise operations and help prevent potential bottlenecks. Established automakers who still heavily rely on the production of internal combustion engine (ICE) vehicles can adopt flexible manufacturing systems that leverage their existing assets to make the transition to EVs less risky and less costly.

More support needed for Thai EV market to change gear

Meanwhile, suppliers, in particular those that currently rely on ICE powertrain parts, need to act fast and prepare the right strategy to pivot to other products and services and develop new partnerships.

Car retailers should play the role of educator to help customers understand the benefits and address any specific concerns. They should also aim to deliver a seamless omnichannel experience and optimise their retail footprint and operations so that they can reduce costs, ABeam said.

Also, EV charging players should investigate what partnerships with automakers, commercial fleet owners or other EV charging players they can develop to increase the number of drivers using their charging stations. Beyond that, there are opportunities to create additional revenue streams by hosting advertisements or collecting commissions from products sold to EV drivers while they charge their vehicles.

Meanwhile, ABeam Consulting has warned that Thailand needs to aggressively prepare to face more fierce competition from Southeast Asia's neighbours, especially Indonesia and Vietnam, if Thailand still aims to be the hub of EV production in the region. Indonesia is one the major producers of nickel, an essential substance to make EV cars. Vietnam has developed its own homemade EV and has the potential to host EV factories because of their cheap labour.

More support needed for Thai EV market to change gear

Earlier this year, the Thai government set the ambitious target to have EVs account for 100 per cent of vehicles sold and 50 per cent of vehicles produced in Thailand by 2035. For a country that averaged about 1 million vehicles in annual sales and 2 million vehicles in annual production before the pandemic, analysts said it was a big task to achieve.

Published : May 18, 2022

By : THE NATION