Thailand’s exclusive EV makers seek to renegotiate government incentives as sales slow By Reuters

By Chayut Setboonsarng

BANGKOK (Reuters) – With electric vehicle sales not expected in Southeast Asia’s biggest market, Thailand’s main group of manufacturers, which includes major Chinese and Japanese firms, is trying to extend production timelines set in a government incentive scheme.

The scheme has helped attract more than $1.44 billion in investment in new production facilities from Chinese EV car makers such as BYD (SZ:) Motors and Great Wall Motor, making Thailand a regional hub in the production of of electric vehicles (EV).

But as sales fall, partly because Thai banks have tightened lending requirements, the Electric Vehicle Association of Thailand (EVA) is asking the government for more time to meet targets in the main stimulus scheme supporting the industry.

“We are trying to negotiate, to extend the production date a little bit,” the group’s president, Suroj Sangsnit, told Reuters, highlighting a previously unreported proposal.

“The terms say we have to produce in a year, so can we ask for another year?” added Suroj, Executive Vice President of SAIC Motor-CP, a joint venture of SAIC Motor and Thailand’s CP Group.

The EV 3.0 plan, as it is called, required companies receiving tax breaks and other support to produce in Thailand this year the same number of vehicles they imported between 2022 and 2023.

Missing the deadline puts a tougher task on them next year as the scheme forces them to produce 1.5 cars for every vehicle imported.

The main Chinese companies supporting the change include BYD, MG Motor, which is owned by SAIC Motor Corp, and Great Wall Motor, Suroj said.

BYD and Great Wall Motor did not respond to a Reuters request for comment.

The concession-seeking is one tactic in a broader push by the electric vehicle industry to manage lower-than-expected sales that have seen them meet with Thai central bank officials this year.

Narit Therdsteerasukdi, secretary-general of the Board of Investments of Thailand, which runs the incentive scheme, declined to comment without receiving guidance from the cabinet of new Prime Minister Paetongtarn Shinawatra.

WOE DEBT

Thailand has long been a center for automotive manufacturing and export, dominated by Japanese brands such as Toyota Engine (NYSE: ) and Honda (NYSE:) Motor, who are also members of EVAT.

Government incentives for electric vehicle production aim to drive the conversion of 30% of the annual production of around 2 million vehicles to electric vehicles by 2030.

Sales of new electric vehicles this year were 43,000 and are likely to miss the EVAT target of 100,000, Suroj added.

They reflect broader weakness in Thailand’s auto industry, where car production fell 17.28 percent in the first seven months of 2024 from a year earlier to 886,069.

Banks have been reluctant to issue loans for electric vehicles because of the deep discounts that have hit asset prices, Suroj said.

“High household debt is squeezing credit, which will make it difficult to sell,” he added.

Already among the highest in Asia, Thailand’s average household debt has risen to a record, thanks to sluggish economic growth, lower incomes and high living costs, a survey showed on Tuesday.

During the June meeting with the Bank of Thailand, the details of which were not made public, EVAT pressed state banks to provide more auto loans.

“One outcome of that meeting was that banks could calculate income as a family or household when considering loans,” said the group’s vice president, Siamnat Panassorn.

The central bank did not respond to a Reuters request for comment.