BANGKOK, Thailand — In a country that has long billed itself as the “Detroit of Asia,” Thailand’s new generation of Henry Fords are coming from a very different place.
China’s imported electric vehicle companies are heavily denting U.S. and Japanese car sales in Thailand, and Chinese manufacturers are investing more than $1 billion to assemble their EVs near Bangkok to expand domestic sales and international exports.
American, European and Japanese carmakers vow to fight back, but the evolving market in Thailand, which has hosted a thriving carmaking industry for decades and is Southeast Asia’s largest vehicle manufacturer and exporter, could provide an early taste of the global shift in power in a key strategic industry.
Toyota, Isuzu, Mitsubishi, Honda, Ford and other manufacturers still dominate a swelling domestic market for traditional internal combustion cars fueled by gasoline, diesel or liquefied petroleum gas.
The foreign-owned factories in Thailand roll out 2.5 million vehicles annually, many targeted for export. Those numbers are only expected to grow after China recently began exporting its EVs into Thailand’s domestic market, while constructing plants in Thailand to assemble Chinese EVs for added sales here and abroad.
At least eight Chinese EV makers have been approved for production investments in Thailand, including BYD, Great Wall Motor, Changan Automobile and GAC Aion, Narit Therdsteerasukdi, secretary-general of Thailand’s Board of Investment, told reporters recently, including an approval to EV-maker Chery that was greenlighted just this week.
It’s not just lower costs and a capable workforce that are drawing the Chinese companies: If the U.S., Europe and elsewhere enforce strict quotas limiting imports of vehicles made in China, future Chinese cars built in Thailand could be one way around those barriers.
Big advantage
China’s big EV advantage is Shenzhen, its port on the southeast coast, where manufacturers can access complex precision sensors, computer chips, batteries and other high-tech hardware and components to build EVs — making China a coveted partner. China’s Communist government has also made electric car manufacturing a top priority of its long-range plan to establish the country as a global high-tech powerhouse.
In the latest flash of investment cash, China’s BYD and Great Wall Motor reportedly agreed to spend $1.4 billion in new EV production and assembly facilities in Thailand.
BYD, or “Build Your Dreams,” intrigued visitors at the Bangkok International Motor Show in March by displaying a $24,000 Dolphin EV, which reportedly runs 300 miles on a single battery charge, and a $44,000 Seal, which cruises 360 miles. BYD made global headlines late last year when it briefly dethroned Elon Musk’s Tesla as the world’s top seller of EVs, although Tesla reclaimed the crown — for now — in the first quarter of 2024.
Chery Automobile’s new deal calls for constructing a factory in Thailand to produce vehicles for the domestic market and export. The Wuhu-based Chery, a state-owned enterprise that is now China’s third-biggest EV maker, expects to begin churning out 50,000 EVs and hybrids in 2025, Thailand’s BOI said on April 22.
Exponential growth
The growth fueled by Chinese investors has been exponential.
“EV sales in Thailand reached 76,314 units in 2023, 7.8 times the previous year,” Tokyo-based Nikkei news reported in February, citing new figures from Autolife Thailand. “BYD ranked first, making up around 40% of EV sales. Chinese companies accounted for 80% or so of EV sales, while Japanese brands were at less than 1%.”
Chinese EVs are estimated to claim about 80% of the domestic market in Thailand, and the three most popular brands also hail from China. Including all makes and models, Chinese carmakers took about 11% of the Thai domestic market overall last year, cutting into the longtime grip held by Toyota and other Japanese rivals. Toyota, which has been slower than many of its rivals to embrace EVs, remained the market leader, but its share of the Thai new auto sales market fell 8 percentage points to 34% in 2023.
BYD’s most popular vehicle in Thailand is the Atto 3 SUV, an offering backed by a professional marketing campaign. “Agile and fun, BYD Atto 3 provides an engaging driving experience,” BYD boasts on its website. “The vibrant and streamlined central console reflects a positive and energetic attitude towards life.”
“BYD sold 30,650 EVs in Thailand last year, followed by 12,777 sold by Neta — a brand of Chinese electric vehicle maker Hozon Auto which is based in eastern China’s Zhejiang province,” The Associated Press reported. Trailing in their wake were Tesla, Britain’s MG, and Chinese carmaker Great Wall Motor.
Most of those sales were of imported EVs.
Much of the new investment to boost Thailand’s EV sector is being funneled into new custom-built, high-tech factories, packed with advanced assembly line infrastructure. Great Wall Motor bought and retrofitted a former General Motors plant in Rayong, east of Bangkok, as a base for its expansion into Southeast Asia, the AP reported.
Thai government officials recently hosted Chinese investors at the high-tech Smart Park Industrial Estate, in the Map Ta Phut economic zone at Rayong port on the Gulf of Thailand. Both car manufacturers and makers of key EV parts and systems were invited.
“Svolt Energy Technology, a Chinese manufacturer of batteries and energy storage systems, is spending [$34.7 million] to build an EV battery factory in Thailand’s east to serve both Chinese and Japanese carmakers,” China Global South’s analysis site reported.
Fighting back
Western and Asian car companies are not ceding the field without a fight. In December, Tesla executives toured an industrial state, escorted by Thai Prime Minister and Finance Minister Srettha Thavisin.
Vehicles are often purchased in Thailand by members of an extended family, who pool their savings and go into debt to afford payments on a high-powered machine durable enough for monsoons, heat, and rural roads. EVs are starting to gain fans in Thailand, even though some owners complained that electric charging stations remain frustratingly hard to find outside of Bangkok.
Southeast Asia is prone to floods — a nemesis for electric cars and their batteries — which may also dull enthusiasm among the 600 million people who live in this region.
EV motorcycles, three-wheel scooters, and public buses may prove more popular in cities where recharging by simply swapping in new charged batteries is easier and faster.
Chinese EV companies are also extending their reach by teaming up with Thai partners, many strategically chosen.
“BYD cooperates with Rever Automotive, designating the company as the exclusive dealer of its cars in Thailand,” TheDiplomat.com recently noted. “Rever Automotive is backed by Thailand’s well-known Siam Motors Group, which has been called ‘Thailand’s automotive king.’ Similarly, SAIC Motor has partnered with Charoen Pokphand Group, Thailand’s largest private company and the largest privately held Royal Warrant holder of the Thai Royal Family, to market its MG brand EVs in the country.”