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EV car Good Cat by Ora, a brand by Great Wall Motors, is displayed at the Bangkok International Motor show in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha/File Photo Acquire Licensing Rights
BANGKOK, Oct 12 (Reuters) – Thailand will provide incentives and tax breaks for carmakers setting up electric vehicle research and development centres, as it seeks to build on early success as a regional EV frontrunner, a government official said on Thursday.
Southeast Asia's second-largest economy is the largest car producer and exporter in the region, with Japanese manufacturers including Toyota Motor Corp (7203.T), Isuzu Motors (7202.T) and Honda Motor (7267.T) dominating the Thai sector for decades.
Thailand aims to convert about 30% of its annual production of 2.5 million vehicles into EVs by 2030 and is preparing incentives to encourage more investment and conversion into EV manufacturing.
"Research and development activities are one of our top priorities because we would like to strengthen our competitiveness," Narit Therdsteerasukdi, secretary general of the Thailand Board of Investment, told Reuters,
Tax breaks and grants would be given on automakers committing R&D investment in Thailand, and additional incentives would be available if they move their regional headquarters to the country, he said.
He did not provide details on how much overall support would be worth.
Various Chinese carmakers have committed to invest $1.44 billion in new production facilities in Thailand, with BYD (002594.SZ) investing nearly $500 million to produce 150,000 EVs a year.
Its rival, Great Wall Motor (601633.SS), said in May it was considering setting-up an R&D centre in Thailand that could work on battery-powered pickup trucks, a mainstay of the Thai auto market.
Japanese automakers including Toyota, Honda, Nissan Motor (7201.T) and Mitsubishi Motors (7211.T), which already have R&D centres in Thailand, would be encouraged to work on EVs in the country, Narit said.
"We will support the existing automakers to transition to EV," he said.
Spurred by a government subsidy of up to 150,000 baht ($4,100) per vehicle, EVs have enjoyed strong sales in Thailand this year, accounting for about half of all EV sales in Southeast Asia in the second quarter of the year.
The new "EV 3.5 package", which is likely to include a purchase subsidy slashed to 100,000 baht per vehicle, should be finalised later year and rolled out by January next year, Narit said.
The scheme will cost about 3 billion baht, research firm BMI said in a note last month. ($1 = 36.2100 baht)
Reporting by Devjyot Ghoshal; editing by Robert Birsel
Our Standards: The Thomson Reuters Trust Principles.
Thomson Reuters
Devjyot reports on Southeast Asia, with a focus on business stories and those involving the nexus of money and power. Previously, he was a politics and general news correspondent based in New Delhi, where he was part of Reuters teams that won India’s Ramnath Goenka Excellence in Journalism Award and the South Asian Journalists Association Award. He is a graduate of Columbia University, King's College London and Loyola College in India.
Tesla CEO Elon Musk said on Wednesday that he was concerned about the impact of high interest rates on car buyers, adding the electric vehicle maker was hesitating on its plans for a factory in Mexico as it gauges the economic outlook.
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