Thailand's automotive industry faces severe EV transition

Thailand's automotive industry, a cornerstone of the national economy, is facing significant disruption as the global shift towards electric vehicles (EVs) accelerates. 

With a market value of 2.1 trillion baht, representing 11% of the country's GDP and employing 690,000 people, the sector is crucial. However, the transition from internal combustion engines to EVs threatens to displace over 100,000 workers, according to analysis by Krungthai COMPASS.

The report forecasts a 15% decline in Thai car production between 2025 and 2026, estimating annual output to fall to 1.47-1.53 million units. This downturn, coupled with the slow adaptation of auto parts manufacturers to the New Energy Vehicle (NEV) market, puts 16.3% of the automotive workforce at risk of redundancy.

"The situation is akin to a semi-crisis," warns Teerasak Yuphech, director of the Automotive Human Resource Development Academy (AHRDA). "Without rapid upskilling and reskilling, workers will struggle to transition to other sectors increasingly reliant on automation, robotics, and AI."

While employees of large manufacturers may benefit from in-house training, those in small and medium-sized enterprises (SMEs) face a skills gap. Digital literacy, automation expertise, and knowledge of green technologies are now essential.

A recent collaborative project between Japan's Ministry of Economy, Trade and Industry and the International Labour Organization (ILO) has identified five key tools to mitigate the impact of this transition:

• Skills needs assessment: Highlighting the growing demand for digital, green, and soft skills alongside technical expertise.
• Training guidelines: Supporting SMEs to enhance productivity and competitiveness while adhering to responsible business conduct standards.
• Occupational mapping: Helping employers, workers, and policymakers adapt to changing job roles and plan for future skills requirements.
• In-company trainer development: Improving work-based learning and promoting lifelong skills development.
• Online training courses: Offering resources on business, decent work, and human rights.

Akkanat Vathanasombat, senior researcher at Chulalongkorn University, emphasises the importance of occupational mapping, particularly in light of the EV transition.

This tool provides clear career pathways for workers and enables businesses to adapt to structural changes.

The Thai government should leverage these tools to facilitate upskilling and reskilling initiatives, particularly for SMEs, and to attract foreign investment in emerging technologies. Failure to adapt could result in significant economic and social consequences, Akkanat warned.