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Electric vehicle (EV) sales in Thailand slowed considerably in 2024 following explosive growth of 320% in 2023, as a reduction in incentives offered to consumers and stricter loan requirements negatively impact the pace of adoption. Despite these challenges, we still estimate growth was 10.5% in EV sales for 2024, as the continued drop in prices and increased local production sustained momentum.
That would represent an EV penetration rate of 15.4% in 2024 as weaker demand from traditional internal combustion engine (ICE) car sales inflates EV sales as a percentage of the total. EV manufacturers in Thailand are seeking to extend production deadlines set by a government incentive scheme as sales have not met expectations.
The scheme has attracted US$1.4 billion in investment from China-based firms including BYD and Great Wall Motor, positioning Thailand as a regional EV production hub. The Electric Vehicle Association of Thailand (EVAT) is negotiating with the government to extend production deadlines by another year for firms seeking to qualify for incentives.
The current EV3.0 plan requires companies to produce the same number of vehicles in Thailand in 2024 as they imported between 2022 and 2023, with stricter targets for 2025. Lower than expected EV sales are part of a broader decline in the Thai auto industry, which recorded a 25.
3% contraction in car production in the first nine months of 2024. In September, the Thai government approved a budget of 7.12 billion baht for an EV subsidy programme.
The first phase provides subsidies of up to 150,000 baht for EVs priced up to 2 million baht, and up to 18,000 baht for electric motorcycles priced less than 150,000 baht. These subsidies go directly to man- ufacturers, with buyers claiming them upon vehicle registration. BYD opened its first EV plant in Southeast Asia, located in Rayong.
The $486-million facility is expected to employ around 10,000 workers and produce 150,000 vehicles annually. Vietnam-based VinFast Auto is postponing its plans to establish a dealer network in Thailand due to a significant decline in the country's passenger vehicle sales over the past year. GAC Aion, the EV subsidiary of GAC Group, inaugurated its first overseas plant in Thailand.
The new plant has an initial annual production capacity of 50,000 units, with plans to expand to 100,000 units, producing several models such as the second-generation Aion V, Aion Y Plus, and Hyper HT. COMMERCIAL VEHICLES In Pattaya, Toyota launched a pilot programme for its new EV, the Hilux Revo-e, marking the company's first electric pickup, aiming to capture a share of Thailand's significant pickup market, currently dominated by Toyota and Isuzu. Toyota plans to manufacture and export the Hilux Revo-e from Thailand by the end of 2025.
Isuzu also intends to produce an electric D-Max in Thailand and begin exports in 2025. We believe the inclusion of electric commercial vehicles in the incentive package will greatly increase adoption in the market. This is particularly relevant given the dominance of the pickup segment in Thailand.
Manufacturers are increasingly expressing their intention to introduce electric pickups in the market. Challenges for electric pickup adoption include higher prices due to larger batteries, limited charging infrastructure, and the need for vehicles to handle long distances and heavy loads. Thailand has about 10,000 charging outlets, mostly concentrated in urban areas, making it difficult for rural users such as farmers to transition to EVs.
Rising demand and adoption of electric buses and trucks in Thailand signify a major move towards sustainable transport solutions. This trend is fuelled by several factors, such as government efforts to cut emissions and encourage eco-friendly transport options. Local companies like Nex and Mine control more than 90% of Thailand's electric bus market, primarily serving fixed routes in urban areas like Bangkok, where demand for sustainable public transport is high.
In contrast, the electric truck market is less developed, with limited numbers in operation, mainly on short urban routes due to range limitations. Government initiatives promoting domestic manufacturing and increasing demand for heavy EV models are expected to provide bus and truck operators with more affordable EVs. This transition is anticipated to make EV adoption more practical for the heavy vehicle industry and encourage investments in charging infrastructure.
CHARGING CONCERNS Thailand's EV fleet is set to increase rapidly as EV adoption accelerates over the coming years. We estimate Thailand's EV fleet reached 233,699 units in 2024 and expect it will grow substantially to 1.1 million units by the end of our forecast period in 2033.
In terms of EV fleet as a percentage of total vehicle fleet, we estimate 1% in 2024, rising to 4% by 2033. According to EVAT, Thailand had 10,846 public charging stations as of July 2024, up 11.8% from the end of 2023.
This implies a passenger EV fleet-to-charging ratio of 22.6 in 2024, meaning charging infrastructure has not kept up with sales growth. This could result in willing buyers delaying EV purchasing decisions as range anxiety concerns increase.
PTT Oil & Retail Business plans to install 7,000 EV charging stations by 2030. PTT operates 2,500 petrol filling stations, most of which are located in Thailand, which will be the foundation for its entry into EV charging. This commentary is published by BMI, a Fitch Solutions Company, and is not a comment on Fitch Ratings' Credit Ratings.
Any comments or data included in the report are solely derived from BMI and independent sources..
