Thailand’s EV Industry, Part 1: Manufacturing Shifts & Policy Implementation

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In response to a reader inquiry about the electric vehicle (EV) market in Thailand, this two-part series will examine why the country has become a key driver of EV adoption in Southeast Asia. This deep dive required a thorough investigation into the policy and industry landscape shaping this transformation.

To create this article, I gathered information from official sources, including Thailand’s Ministry of Energy and Ministry of Industry as well as the Thai Automotive Industry Association (TAIA) and the Thailand Automotive Institute (TAI). Insights from the Electric Vehicle Association of the Philippines were also used to provide a broader regional context.

This report is built upon the comprehensive data provided by YCP’s “Thailand’s EV Powerhouse: 2024 Guide to the EV Market.” I have integrated the latest available data from different manufacturers from the first half of the year to provide a current and comprehensive look at the market.

Thailand has established quantifiable dominance in Southeast Asia’s electric vehicle sector, securing 54% of regional battery electric vehicle (BEV) market share in 2023 while simultaneously implementing comprehensive industrial transformation strategies. Analysis of 2024 market data reveals sophisticated policy coordination driving electrification adoption rates that substantially outpace traditional automotive market performance indicators.

Macroeconomic Context & Segmentation

Southeast Asian automotive markets experienced systematic contraction during 2024, with Thailand recording the most significant decline at 24.2% in Q2 2024. Third-quarter data indicates a sustained 14% year-over-year reduction in aggregate vehicle sales, attributed to structural economic factors including household debt-to-GDP ratios of 91% and restrictive lending protocols. Financial institutions implemented tightened underwriting standards, elevating auto loan rejection rates from 15% to 20% for new vehicle purchases and 20% to 30% for used vehicles.

Within this contractive macroeconomic environment, electric vehicle segments demonstrated statistically significant growth trajectories. BEV sales estimates indicate 5% year-over-year expansion in 2024, achieving 13% penetration of new vehicle registrations with unit volumes exceeding 79,000. This performance differential suggests structural market shifts toward electrification independent of broader economic cycles.

Hybrid electric vehicle (HEV) adoption exhibited the most pronounced growth metrics, recording 60% year-over-year expansion in Q3 2024, with sales reaching 103,686 units. Consumer preference data indicates HEV selection based on operational efficiency improvements without infrastructure dependency requirements. Conversely, plug-in hybrid electric vehicle (PHEV) registrations declined 23% to 7,303 units, reflecting market polarization toward either full electrification or conventional hybrid solutions.

Toyota’s Aggressive Electrification Counter-Strategy

We need to start the industry’s discussion with Toyota’s presence in Thailand and its counter-strategy versus Chinese manufacturer dominance in the EV (or new energy vehicle) market. The Japanese carmaker’s moves represent a comprehensive strategic pivot rather than gradual adaptation. The company has accelerated electrification initiatives across multiple vehicle segments while leveraging its established manufacturing infrastructure and supply chain relationships to compete directly with Chinese EV manufacturers.

The most significant development is Toyota’s preparation for mass production of the Hilux BEV, potentially launching in 2025. The Hilux represents Thailand’s best-selling pickup truck, making its electrification a strategic market defense move targeting one of Toyota’s core strengths in the Thai automotive market. Six Hilux BEV units are currently undergoing public transport trials in Pattaya through partnership with municipal authorities, demonstrating Toyota’s commitment to practical EV deployment rather than conceptual development.

Last month, Toyota launched the Yaris Ativ HEV GR Sport, expanding hybrid options within its compact vehicle segment and reinforcing the company’s multi-pathway electrification approach. This launch demonstrates Toyota’s strategy of offering electrified variants across its Thai market lineup rather than limiting electric options to premium segments.

Toyota has implemented substantial supply chain modifications to support local EV production, increasing utilization of locally sourced components, particularly from Chinese suppliers, for batteries and electric motors in Thai-manufactured vehicles. This supply chain adaptation indicates strategic acceptance of Chinese technological capabilities while maintaining Toyota’s manufacturing presence in Thailand.

Toyota’s multi-pathway strategy encompasses hybrid, battery-electric, and hydrogen fuel cell technologies, enabling the company to address diverse market segments and government policy requirements simultaneously. This approach allows Toyota to maintain market flexibility while Chinese competitors focus primarily on battery-electric solutions. (This will have its own story.)

Electric Two-Wheelers

Electric motorcycle adoption achieved 26% year-over-year growth in Q3 2024, reaching 1.5% market penetration within the total two-wheeler segment. Commercial applications have emerged as the primary adoption driver, particularly within last-mile delivery services. Grab has deployed electric motorcycle fleets across Bangkok, Chiang Mai, Pattaya, Khon Kaen, and Korat, implementing rental programs for delivery partners seeking operational cost optimization.

Market leadership dynamics shifted significantly in 2024, with Lion (Haonaiqi) achieving 27% market share, surpassing longtime market leader Deco (23% share). EM secured 18% market share, representing substantial advancement from previous periods. Local manufacturers collectively maintain 81% market control, indicating domestic production competitiveness in this segment.

Battery swapping infrastructure development remains limited despite market growth. Aionex plans 300 battery swapping stations by 2025, while Oyika, through partnership with Banpu Next, targets over 300 stations nationwide. Current operational deployment includes 70 stations in Bangkok and Phuket, indicating concentrated urban deployment strategies.

Commercial Vehicle Electrification

Electric commercial vehicle adoption presents divergent performance across vehicle categories. Electric truck registrations increased 47% year-over-year, reaching 360 units through September 2024 and doubling adoption rates from 0.7% to 1.7%. Corporate adoption includes logistics companies DSV and retailer HomePro implementing electric truck fleets for sustainability compliance and operational cost management.

Government policy support includes 150% tax deduction programs for electric commercial vehicle purchases through 2025. Companies purchasing domestically manufactured vehicles qualify for double purchase cost deductions, while imported vehicles receive 1.5 times purchase cost deductions. This policy structure incentivizes local manufacturing development while supporting fleet electrification.

Electric bus adoption experienced 75% year-over-year decline from Q3 2023 to Q3 2024, attributed to completed public procurement cycles and limited private sector demand. The Bangkok Metropolitan Administration’s initial electric bus orders through Thai Smile Bus represented the primary adoption driver, but order completion coincided with minimal followup procurement.

Local manufacturers Mine and Nex maintain over 70% combined market share in electric bus segments. Nex holds 43% of that market share and this dominance indicates established commercial vehicle electrification capabilities within the country’s industrial base.

The Charge of the Light Tuk-Tuks

Electric tuk-tuks are rapidly gaining ground in Thailand, following the traditional shift from two-stroke engines to LPG and now to electric power. While adoption rates dipped from 32% to 13% in 2023–2024, this was largely due to the completion of initial government fleet orders rather than waning interest. In fact, the market is expanding with strong policy support and new business models. Pilot programs offering full subsidies for converting internal combustion tuk-tuks to EVs underscore the government’s commitment, while major financing deals — such as the Asian Development Bank and BANPU’s 2.4 billion baht loan to deploy 1,500 six-seater electric tuk-tuks and charging stations — signal large-scale investment in this sector.

One of the most significant developments is MuvMi, an app-based ride-sharing service that operates over 600 electric tuk-tuks across 12 Bangkok neighborhoods. Unlike traditional privately owned tuk-tuks, MuvMi integrates with Bangkok’s transit network to provide first- and last-mile connections, addressing a critical urban mobility gap. Their fleet, powered entirely by electricity, helps cut noise, air pollution, and PM 2.5 emissions, showcasing how electrification can pair with digital platforms to transform city transport. Taken together, these trends highlight that Thailand’s EV transition goes beyond cars and motorcycles to include the country’s most iconic three-wheeler, signaling a broader shift toward comprehensive and innovative urban mobility solutions. (Watch out for a separate article on the rise of the eTuktuk.)

“30@30” Strategy: A Policy Framework

Thailand’s electric vehicle strategy implementation centers on the EV 3.5 program, allocating THB 7.12 billion through 2027 for local production stimulation. The program targets annual production of 725,000 zero-emission vehicles and 675,000 motorcycles by 2030, supporting the “30@30” strategy objective of achieving 30% zero-emission vehicle production within the decade.

Board of Investment (BOI) of Thailand’s approval patterns indicate strategic evolution from large-scale vehicle manufacturing toward comprehensive supply chain development. EV vehicle investment values decreased from THB 14.5 billion to THB 12.7 billion between first nine months of 2023 and 2024, while approved project quantities nearly doubled from 23 to 39. This shift reflects industry maturation toward ecosystem development rather than singular manufacturing investments.

Recent policy developments include excise tax reduction measures for hybrid electric vehicles from 2028–2032, targeting THB 50 billion investment attraction. Qualification criteria include CO₂ emissions limitations of 120 g/km, local battery and component production requirements, and advanced driver assistance system integration. These specifications encourage technology transfer and local manufacturing capabilities.

The Ministry of Finance considers excise tax structure modifications, including tiered battery taxation replacing the current 8% flat rate. This revision aims to incentivize cleaner battery production technologies and support environmental sustainability objectives within the taxation framework.

Next up: China’s “overwhelming” strategy in Thailand.

Email me: tribs.tribdino@gmail.com