Thailand aims for electric vehicles to form 30% of car production to tackle pollution

Thailand has the advantage of being a car production hub. PHOTO: AFP

BANGKOK (BLOOMBERG) - Thailand will target having electric vehicles account for 30 per cent of car production by the end of the decade as part of efforts to tackle toxic air pollution.

The government wants to "accelerate the use and production of electric vehicles (EVs), with national strategies focusing on the environment and air pollution solutions", Industry Minister Suriya Juangroongruangkit said in an interview.

Thailand already has the advantage of being a car production hub and it is now time to focus on EVs, he said.

While the overall contribution from vehicles to pollution is much smaller than other sources like crop burning or forest fires, a survey commissioned by Nissan Motor Co showed that 91 per cent of Thais would buy an EV because of the environmental impact.

The survey found 43 per cent of Thai non-EV owners would consider an EV for their next car purchase within the next three years.

Some of the measures to stimulate the domestic market and achieve the 2030 goal include encouraging the use of electric vehicles by state agencies, tax benefits and parking discounts for buyers, more investment incentives for companies, and developing charging infrastructure across the country, Mr Suriya said.

The 30 per cent target will include cars, motorbikes and buses, he added.

Such initiatives would support continued growth of EV sales in Thailand, Mr Allen Abraham, an analyst at BloombergNEF, wrote in a Feb 4 report.

While the Thai EV market is still small, it showed "great resilience" last year despite the pandemic denting overall auto sales, Mr Abraham said.

EV car sales increased 1.4 per cent in 2020, while regular auto sales slumped 26 per cent.

Thailand's Board of Investment has already granted EV privileges to more than a dozen companies, including Nissan, Toyota Motor Corp, Mercedes-Benz AG, BMW AG, and Energy Absolute Pcl's Mine Mobility.

In November, the government approved new incentives to boost production of EVs and its supply chain, including a three-year tax holiday for manufacturers of plug-in hybrid vehicles, and an eight-year corporate income tax waiver for battery-powered electric vehicle makers.

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