Electric shock: Chinese EV makers moving in on rivals in lucrative Thai market

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BANGKOK — A new generation of Henry Fords in what has been billed as the “Detroit of Asia” comes from an entirely different place. 

China’s imported electric vehicle companies are heavily denting U.S. and Japanese car sales in Thailand, and Chinese manufacturers are investing more than $1 billion to assemble their EVs near Bangkok to expand domestic sales and international exports.

Thailand has had a thriving automaking industry for decades and is Southeast Asia’s largest vehicle manufacturer and exporter.  American, European and Japanese automakers vow to fight the evolving market but could get a taste of the global shift in power in a strategic industry.

Toyota, Isuzu, Mitsubishi, Honda, Ford and other manufacturers still dominate a swelling domestic market for traditional internal combustion cars fueled by gasoline, diesel or liquefied petroleum gas.

The foreign-owned factories in Thailand roll out 2.5 million vehicles annually, many targeted for export, and those numbers are expected to grow. China has begun exporting its EVs into Thailand’s domestic market while constructing plants in Thailand to assemble Chinese EVs for added sales here and abroad.

At least eight Chinese EV makers have been approved for production investments in Thailand. Narit Therdsteerasukdi, secretary general of the Thai Board of Investment, told reporters that they include BYD, Great Wall Motor, Changan Automobile and GAC Aion.  EV-maker Chery was greenlighted last week.

Chinese companies are lured by the lower costs, a capable workforce, and a way around any quotas from the U.S. or other nations on vehicles made in China.

Big advantage

China’s big EV advantage is Shenzhen, its port on the southeast coast, where manufacturers can access complex precision sensors, computer chips, batteries and other high-tech hardware and components to build EVs. The communist government has made electric car manufacturing a top priority of its long-range plan to establish China as a global high-tech powerhouse.

In the latest flash of investment, BYD and Great Wall Motor reportedly agreed to spend $1.4 billion on new EV production and assembly facilities in Thailand.

BYD, or Build Your Dreams, intrigued visitors at the Bangkok International Motor Show in March by displaying a $24,000 Dolphin EV, which reportedly runs 300 miles on a single battery charge, and a $44,000 Seal, which cruises 360 miles. BYD made global headlines late last year when it briefly dethroned Elon Musk’s Tesla as the world’s top seller of EVs. Tesla reclaimed the crown in the first quarter of this year.

Chery Automobile’s deal calls for constructing a factory in Thailand to produce vehicles for domestic and export markets. The Wuhu-based Chery, a state-owned enterprise, is China’s third-biggest EV maker. It expects to churn out 50,000 EVs and hybrids in 2025, Thailand’s Board of Investment said on April 22.

Exponential growth

The Chinese investors have fueled exponential growth.

“EV sales in Thailand reached 76,314 units in 2023, 7.8 times the previous year,” Tokyo-based Nikkei news reported in February, citing figures from Autolife Thailand. “BYD ranked first, making up around 40% of EV sales. Chinese companies accounted for 80% or so of EV sales, while Japanese brands were at less than 1%.”

Chinese EVs are estimated to claim about 80% of the domestic market in Thailand. The three most popular brands also hail from China. Including all makes and models, Chinese automakers took about 11% of the Thai market overall last year, cutting into the longtime grip of Toyota and other Japanese rivals. Toyota, which has been slower than many of its rivals in embracing EVs, remained the market leader, but its share of the Thai new auto sales market fell 8 percentage points to 34% in 2023.

BYD’s most popular vehicle in Thailand is the Atto 3 SUV, an offering backed by a professional marketing campaign. “Agile and fun, BYD Atto 3 provides an engaging driving experience,” BYD boasts on its website. “The vibrant and streamlined central console reflects a positive and energetic attitude towards life.”

“BYD sold 30,650 EVs in Thailand last year, followed by 12,777 sold by Neta — a brand of Chinese electric vehicle maker Hozon Auto, which is based in eastern China’s Zhejiang province,” The Associated Press reported. Tesla, Britain’s MG and Chinese automaker Great Wall Motor followed.

Most of those sales were EV imports.

Much of the new investment to boost Thailand’s EV sector is funneled into custom-built, high-tech factories packed with advanced assembly line infrastructure. Great Wall Motor bought and retrofitted a former General Motors plant in Rayong, east of Bangkok, as a base to expand into Southeast Asia, AP reported.

Thai government officials recently hosted Chinese investors at the high-tech Smart Park Industrial Estate in the Map Ta Phut economic zone at Rayong Port on the Gulf of Thailand. Automobile manufacturers and makers of key EV parts and systems were invited.

“Svolt Energy Technology, a Chinese manufacturer of batteries and energy storage systems, is spending [$34.7 million] to build an EV battery factory in Thailand’s east to serve both Chinese and Japanese carmakers,” China Global South’s analysis site reported.

Fighting back

Western and Asian car companies are not ceding the field without a fight. In December, Tesla executives toured an industrial state, escorted by Thai Prime Minister and Finance Minister Srettha Thavisin.

Vehicles are often purchased in Thailand by members of an extended family who pool their savings and go into debt to afford payments on a high-powered machine durable enough for monsoons, heat and rural roads. EVs are gaining fans in Thailand, even though some owners complain that electric charging stations are difficult to find outside Bangkok.

Southeast Asia is prone to floods — a nemesis for electric cars and their batteries — which may also dull enthusiasm among the 600 million people in this region.

EV motorcycles, three-wheel scooters and public buses may prove more popular in cities where recharging by simply swapping in fresh batteries is easier and faster.

Chinese EV companies are also extending their reach by teaming up with Thai partners, many strategically chosen.

“BYD cooperates with Rever Automotive, designating the company as the exclusive dealer of its cars in Thailand,” TheDiplomat.com recently noted. “Rever Automotive is backed by Thailand’s well-known Siam Motors Group, which has been called ‘Thailand’s automotive king.’ Similarly, SAIC Motor has partnered with Charoen Pokphand Group, Thailand’s largest private company and the largest privately held Royal Warrant holder of the Thai Royal Family, to market its MG brand EVs in the country.”