Thailand Continues to Introduce Incentives to Strengthen Electric Vehicle Production Capabilities. (Photo: iStock)
To attract investment from electric vehicle (EV) related businesses, the Thai government has rolled out a series of incentives, prompting responses from major multinational companies. Among them, Japan’s Nissan plans to increase its production of hybrid vehicles in Thailand, while South Korea’s Hyundai has announced plans to expand its production lines for pure electric vehicles.
The Board of Investment (BOI) has recently introduced new tax reduction plans to encourage joint ventures in manufacturing automotive components, aiming to strengthen the EV industry chain.
Nissan plans major investment in hybrid production
Nissan has not disclosed the exact investment amount but has indicated it will exceed the Thai government’s requirement of 3 billion baht (about 90 million USD). The company plans to introduce five new models between 2025 and 2027 and will produce hybrid vehicles in Samut Prakan province. Following the entry of Chinese car manufacturers with competitive pricing, which has transformed the market previously dominated by Japanese brands, Nissan has seen a reduction in service points in Thailand. Currently, there are 141 Nissan service centers, down from 161 in 2023. However, the company remains optimistic about a rebound in market share to 3% and expects total sales to reach 640,000 to 650,000 units this year.
Nissan was identified in late July as a potential beneficiary of BOI’s incentive measures, which require manufacturers to invest more than 3 billion baht within four years in exchange for possible tax exemptions.
Thailand's EV push gains Hyundai support
South Korean automaker Hyundai plans to invest 1 billion baht (about 30 million USD) to expand its production of battery electric vehicles (BEVs) and battery assembly in Thailand. This move aligns with Thailand's EV3.5 phase two plan, which will begin in 2026. The EV3.5 plan includes incentives for consumers, manufacturers, battery producers, key components suppliers, and charging station operators, with the basic requirement being local production in Thailand.
Hyundai is set to invest 1 billion baht to expand its BEV production and battery assembly operations in Thailand. (Photo: Hyundai)
BOI Secretary-General Narit Therdsteerasukdi stated that Hyundai’s entry into the Thai market is a positive sign for the electric vehicle sector, affirming Thailand’s capacity to be a production base and significant market. Thailand’s robust supply chain will provide Hyundai with at least one-third of its raw materials and components.
Upon approval of Hyundai’s new factory project, the company plans to collaborate with its strategic partner, Thonburi Automotive Assembly Plant, located in Samut Prakan province near Bangkok. Statistics show that 18 car manufacturers from China, Japan, and Europe have already announced or are expected to start EV production in Thailand within the next two years.
To achieve its goal of having zero-emission vehicles, electric motorcycles, buses, and trucks make up 30% of the market by the end of 2030, the Thai government continues to introduce new incentives. The BOI has recently launched additional measures to encourage joint ventures between Thai and foreign enterprises in manufacturing various automotive components, hoping to accelerate the local industry’s transformation with international expertise.
Source: Bangkok Post(1), (2), Reuters
