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China’s BYD Takes Pole Position in Thailand, Southeast Asia’s Largest EV Market

BYD's Atto SUV is the dominant vehicle in the Thai EV sector, accounting for nearly a third of the entire market. Chatchai Somwat / Alamy Stock Photo

Chinese electric vehicle brand BYD has been taking over Thailand by storm. Its most popular model – Atto 3 SUVs now controls 31% of Thailand’s electric vehicle (EV) segment, less than a year after it launched in October 2022. 

This number was way ahead of the Chinese-made Neta V’s 9,200 new vehicles registered and beat the Tesla Model Y, which sold over 4,700 with a 9% market share, according to the figures between January and September this year. In September alone, BYD’s latest release the BYD Dolphin became the best seller with over 1,600 of them sold. 

For automotive journalist Nithi Thuamprathom, there are plenty of reasons why BYD is so successful in Thailand. “The pricing, the way it looks, and the quality. It is up there with the Japanese non-electric SUV models,” said Nithi who runs the website AutolifeThailand. “The confidence also comes from the media who gave it positive feedback after a test drive.” 

Thailand has been the largest automotive producer and exporter in Southeast Asia for at least half a century, thanks to a significant number of Japanese car manufacturers that have been around in that time period. Now, Thailand is the biggest market for EVs in Southeast Asia, with a 78.7% sales share of battery electric vehicles, leaving Indonesia and Vietnam far behind at 8% and 6.8% sales shares respectively in the first quarter of 2023.

The changing landscape sees Thailand’s local car dealers moving to distribute Chinese EVs. At the same time, there are fewer or less frequent product launches by the Japanese car brands, said Thuamprathom. Nearly 9,000 new Battery EVs were registered in September, a 300% increase year-on-year, according to the Federation of Thai Industries. 

Chinese EV cars first entered Thailand in 2019 with MG Motor’s MG ZS, followed by Great Wall Motor’s Ora Good Cat – known for its cutesy, retro look – which sparked a mainstream sensation in 2021 with record pre-orders. In 2022, BYD arrived in Thailand, launching its flagship model and setting up a $495 million manufacturing plant in the east that will start production in 2024 for export to Southeast Asia and Europe. 

Others are following suit. Hozon New Energy Automobile, the maker of Neta, is setting up the plant to start producing the Neta V domestically in 2024. The Guangzhou-based GAC AION recently said it planned to launch two car models in Thailand along with opening 50 showrooms nationwide by the end of this year, while Changan Automobile is expected to launch in Thailand before year-end and the plan to establish a 100-000 capacity vehicle plant is underway. 

The King of Affordable EVs

Thanks to the wide array of new Chinese EVs in the market, Thai consumers have a number of affordable options — much more than other countries. Major drivers include various government subsidies for consumers, incentives for investors, and the China-ASEAN free trade agreement that opens up access to the Thai market duty-free. Plus, Chinese manufacturers have a unique ability to produce EVs at a very low cost. 

“Chinese OEMs (original equipment manufacturers) are the only ones in the world that can offer a full range of EVs already today – from the very affordable compact city cars to high-end premium sedans and SUVs,” said Pedro Pacheco, vice president of research at consultancy Gartner.

Climbing imports of Chinese EV cars are impacting Thailand’s domestic car producers. In July, the Federation of Thai Industries said domestic car producers slashed production targets this year by about 50,000 units.

Globally, China is challenging established carmakers too, including Japan. Toyota, for example, sold fewer than 25,000 EVs worldwide last year. Tesla’s global vehicle deliveries last year included 1.31 million EVs, while BYD sold more than 1.85 million electric cars, including plug-ins.

Thailand’s EV ecosystem itself is supported by Chinese investment.  Svolt Energy Technology, a Chinese manufacturer of batteries and energy storage systems, is spending 1.25 billion baht to build an EV battery factory in Thailand’s east to serve both Chinese and Japanese carmakers. 

Despite the expansion of Chinese EVs in Thailand, economic scholar Aat Pisanwanich said Japanese carmakers might not move their bases out of Thailand yet. The country is still a base for the billion-dollar supply chain for Japanese automobiles, despite their market share expected to be slashed by under 20% with the Chinese EVs inroad, he said. 

Prime Minister Srettha Thavisin, meanwhile, is adamant about increasing foreign investments. All are welcome. He attended the Belt and Road Forum to meet with Chinese EV investors. This month, Thavisin vowed to support Japanese carmakers’s production of internal combustion engine vehicles for the next 10-15 years to ensure a smooth transition to EVs. He talked to Tesla co-founder Elon Musk in New York, via videoconference, during the UN General Assembly to discuss possible investment in Thailand. Tesla has a subsidiary in Thailand, but no plants are in the pipeline.

“The real question for me is how long will [Chinese EV’s] competitors take to be able to offer affordable EVs?” said Pacheco, the Gartner researcher.

Thailand’s shift towards EVs, however, still has to rely on its reputation of having an open approach to investments in its automotive industry, which has allowed automakers to enter the market with very little friction, according to Koketso Tsoai, automobiles analyst at BMI Fitch Solutions. 

Tsoai continued: “Not all legacy automakers will make the cut, and we really don’t expect the Thai government to focus solely on getting traditional automakers to transition smoothly, which we think would be a burden and unfair”.

Tsoai said he expected Thailand to be an EV regional hub due to its “first mover advantage, achieved through an aggressive incentive offering that remains unmatched when considering Malaysia and Indonesia”.

“We expect both Malaysia and Indonesia to sell about 40% of what Thailand will achieve in 2023. This means the relatively large local market makes Thailand a preferred destination and we expect this trend to continue for some years to come,” added.

However, there is still ample room for inter-ASEAN cooperation, Tsoai said. Indonesia is rich in the required battery minerals like nickel and cobalt, and he viewed Malaysia as having a superior electronics industry. 

Thailand hopes that by 2030, EV production will constitute 30% of all vehicles produced domestically. Yet crucial infrastructure is still largely missing in Thailand. For one, a lot more charging stations will need to be built to support further uptake of EVs.

According to the Electric Vehicle Association of Thailand, Thailand had 1,482 public charging stations as of June 2023. Thai major energy conglomerate PTT Oil & Retail Business Plc plans to install 7,000 charging stations by 2030.

Thailand also needs to ensure sufficient manufacturing capacity and R&D capacities, as well as a large enough local market that is able to absorb a significant amount of locally produced EVs. 

“Thai consumers are eager to experiment with EVs now but in the next 1-2 years we will have a clearer picture of whether EVs are suitable for Thailand,” Nithi, the automotive journalist, concluded.

Jitsiree Thongnoi is a journalist based in Bangkok, Thailand. She focuses on politics, social equity and China’s role in Southeast Asia.

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