EV makers advised to look for export markets as oversupply looms
Previously hailed for promoting domestic production, the EV 3.0 policy risks causing a significant oversupply of electric vehicles
The Thai Electric Vehicle Association (EVAT) is urging manufacturers of electric vehicles (EVs) in Thailand to prepare for oversupply in the next few years due to the production requirement under the EV 3.0 policy.
The policy offers import tax exemption for EV makers as well as other subsidies, but mandates them to produce the cars locally at a ratio of 1:1 to those imported in 2024 (importing 1 EV for every 1 locally produced EV) and a 1:1.5 ratio for cars imported in 2025 (importing 1 EV for every 1.5 locally produced EVs).
“It is estimated that by 2025 EV makers will need to produce 180,000 units to offset the imports,” EVAT president Krisda Utamote said on Wednesday. “With the low purchasing power in the Thai market, automakers will need to seek out secondary markets to distribute their products or risk suffering losses from oversupply.”
Krisda estimated that the Thai market has a total demand of around 600,000 EVs, while total production capacity of seven EV makers in Thailand stands at 490,000 units. If factories run at full capacity, this will drive production to exceed 60% of the demand.
He also advised the national electric vehicle board (EV board) to consider measures to help relieve oversupply if it were to happen, including urging financial institutes to relax their loan requirements to allow more people to buy EVs.
The Excise Department has estimated that about 185,029 EVs will be imported under the EV3.0 policy. Of these, 84,195 EVs were imported in 2022-2023, 66,448 in 2024, and 34,386 will be imported in 2025.
The top five companies expected to import the most EVs between 2022 and 2025 are: Rever Automotive (77,247 units), Neta Auto (40,837), MG Sales (27,186), Great Wall Motor Manufacturing (24,225), and EV Primus (8,493).
The department said that so far it has disbursed subsidies to EV makers for their imports of around 40,000 units from a total of 75,000 units imported. It will soon ask the Cabinet for a budget of 7 billion baht to subsidise the rest.
Manufacturers who fail to complete the ratio of domestic production to offset their imports will need to return the subsidies and will be penalised at twice the amount of import tax exempted.
