A Transition Toward the Electrification of the Thai Automotive Industry

This paper examines the evolving Thai automotive industry, focusing on its transition towards electrification. Since the industry’s liberalization in the 2000s, Thailand has become the largest production and export hub for Japanese carmakers outside Japan, with industrial policy playing a key role in this growth. The rise of electric vehicles (EVs) offers Thailand an opportunity to become a leading EV production hub in Southeast Asia. This shift is driven by the Thai government’s efforts to attract investments from both Japanese and Chinese manufacturers. Chinese firms, leveraging Thailand’s industrial infrastructure and introducing their own suppliers, diversify the country’s industrial base and reduce reliance on Japanese investments, heightening competition. Japanese carmakers, rooted in ICE technology, favor HEVs and PHEVs as a gradual step towards full electrification. However, declining battery prices have made EVs cost-competitive with ICE vehicles, strengthening the global position of Chinese manufacturers. Japanese firms continue to lean towards HEVs, balancing innovation with existing supply chain challenges. The competition between Chinese and Japanese car manufacturers is intensifying globally and Thailand is an important production hub where this rivalry is clearly visible. These developments indicate a pivotal period of transition that will shape the future of the Thai automotive industry.