BrazilStudy shows popularity of electric vehicles in Thailand remains low
The number of electric vehicles in Thailand remains low, with under 85,000 hybrids and plug-in hybrids in the country. And although demand for electric cars is expected to remain low in the near future, increased incentives, lower prices, and better infrastructure will boost adoption in the longer term according to a report from KPMG.
Globally, electric vehicles (EVs) are gaining ground on traditional vehicles with internal combustion engines (ICEs). According to a study from the International Energy Agency, EVs are expected to account for 35% of all global vehicles by 2040. With concerns about air quality in Asia’s rapidly expanding cities, as well as the devastating effects of emissions-driven climate change, changing vehicles over to more environmentally-friendly technology is gaining in urgency. Bhutan, for example, currently has very poor air quality, while its vehicle emissions are expected to triple by 2030 – a dangerous combination.
The current level of EV adoption in Thailand, meanwhile, is quite low, even though hybrid electric vehicles (HEVs) were introduced in the country around 2009. According to statistics from a Thailand Land Transport Department report from 2017, the number of HEVs and plug-in hybrid electric vehicles (PHEVs) stood at 84,236; additionally, there were only 63 fully battery electric vehicles (BEVs) in the country.
While there was a huge spike in vehicle sales in Thailand after 2011, the number of electric vehicle sales has remained a small proportion of total sales. A report from accounting and consulting firm KPMG forecasts future EV sales in Thailand to remain modest in the near future, constituting only 1% of passenger cars in the country.
However, in the long-term, trends such as shifting auto manufacturer focus, environmental policies and incentives, as well as improving technology, will push the greater adoption of EVs in even nascent markets like Thailand.
“The technological advances in power storage together with the urgent need to improve air quality in the cities to compensate for the consequences of urban development will fuel the growth of EV’s popularity tremendously,” remarked KPMG Thailand Head of Climate Change and Sustainability Services Paul Flipse.
“It can be anticipated that the market penetration of EV in Thai society is undeniable and inevitable. Auto industry and power industry have to reassess their business model and prepare for the technological and behavioral changes. It is an example of disruption at its best,” Flipse added. 
The Thai government is now moving to support the consumer adoption of EVs. The country has trailed Japan and China in developing charging infrastructure and consumer tax incentives – which manufacturers say are critical to the successful uptake of EVs. The government is now pledging to build up EV infrastructure, installing 690 charging stations in the country by 2036.
The government has also lowered excise taxes on electric vehicles manufactured in the country, hoping to boost local EV manufacturing. Currently, Japanese manufacturers Toyota, Nissan, and Mitsubishi primarily build trucks and SUVs in Thailand. The lowered excise taxes, which are imposed at the moment on manufacture, will also reduce the price of EVs for Thai consumers. In response, Nissan is already in talks with the Thai government to produced electric cars and batteries in the country. Thailand hopes that more manufacturers will follow suit.
However, KPMG argues that the government can do more to boost EV adoption. Thailand should aim to provide incentives on electric car purchases, such as a subsidy on the base price of EVs, in order to make them more attractive to consumers. Additionally, KPMG says that it would be beneficial for the Thai government to have a well-defined central authority responsible for driving and monitoring its electric vehicle policy.
Combined with government incentives and increased charging infrastructure, cheaper prices will make Thai consumers more ready to adopt EVs. The cost of battery technology is rapidly declining, falling at a CAGR of 17.5% from 2010 to 2016. KPMG predicts that the cost of lithium ion batteries will continue falling at a CAGR of 12% from 2017 to 2025. Since battery costs make up such a large portion of an EV’s cost and maintenance, their falling price makes the cars a much more cost-effective proposition.
Auto manufacturers are responding to government incentives, cheaper inputs, and increasing global consumer demand with the roll out of an increasing number of EVs. Nearly every major manufacturer is now producing hybrid vehicles, with many also building fully battery electric cars. Chinese-owned Swedish car maker Volvo has even stated that it will only make hybrid and electric vehicles from 2019 onward.
Nissan, which has heavily invested in EV tech, said that it would soon be launching its all-electric Leaf in Thailand, along with four other Southeast Asian countries. Nissan, though, said that it would also consider offering its hybrid Note, since demand for BEVs remains low in Thailand. And although demand for EVs generally remains low in Thailand, long-term trends point to greater adoption, eventually.
