13 July 2022
SPEEDA ASEAN Research & Analysis Team Analyst (Thailand)
The Southeast Asia EV market is in its growing phase, especially in Thailand and Indonesia which are aiming to become EV hubs. This report by Phutaneth Lohsakul from Uzabase's ASEAN Research & Analysis team who covers the Thailand market, shares insight into the EV industry focusing on Thailand, the largest producer of vehicles in the ASEAN region.
The full video of the presentation can be found at the end of this article.
You can find the 3 types of EVs in the below image.
Key components of each EV type are listed in the below image. The black part in the graphic indicates major components used in ICV (internal combustion vehicles), which rely on gasoline/diesel. Meanwhile, the blue part in the graphic indicates EV-related components. For HEVs and PHEVs, their vehicles are capable of using both gasoline/diesel and electricity as fuel, thus sharing components from ICVs and BEVs. BEVs (an example is Tesla cars), however, rely solely on electricity, meaning there are no ICV parts involved.
The supply chain impact from ICVs to HEVs are expected to be limited in the short term as ICVs, HEVs and PHEVs share some of their parts together. This also applies for replacement equipment manufacturing (REM) in the next 5-7 years as the adoption of BEVs is still slow.
By mid to long-term, however, the impact will be more significant as more consumers adopt EVs. EVs currently have about 500 components, a stark contrast to ICVs which need thousands of parts. Also, through this manufacturing shift, the focus will be on batteries. For EVs, batteries are the core of the vehicle making up most of the production cost. Players, who have an integrated chain for batteries with access to the raw materials (cobalt, nickel), will have a strong advantage for the industry.
The growth of EVs has increased drastically in these few years with HEVs making up about four-fifth of all registered EVs in Thailand. Despite the rapid growth, EVs still make up less than 1% of all registered vehicles in Thailand.
Thailand has had EV policies since 2016. The revised policy expects EVs to reach 18.41M vehicles by 2035, a significant revision from the initial 70K. The government also provides different incentives to encourage the production of EVs and places EVs in the low-duty tax category. The below chart shows the manufacturers who have received the incentives to manufacture EVs in Thailand. These incentives include tax and non-tax incentives.
Indonesia is the other country in ASEAN which has the potential to lead the EV market. As a competitor, The threat of Indonesia to Thailand is not only their production itself but also the country’s supply chain where Indonesia has one of the largest the nickel reserves. This allows the country to produce EV batteries at a low cost. The global players in the EV market are also showing interest in EV battery production in Indonesia, which is a threat to Thailand.
Another challenge is the uncertainty of the adoption of EVs as it is difficult to predict how long it will take for consumers to fully adopt EVs. The infrastructure for EVs are still nascent where only 3% of the gas stations have charging stations for EVs. They are also mainly based in Bangkok, making it difficult for consumers to reliably travel outside of Bangkok via EVs.
