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The Impact of EV 3.5 Policy: Long-Term Outlook on Thailand's Automotive Industry

The EV 3.5 policy is expected to have several significant long-term effects on Thailand's automotive industry:

1. Transformation into an EV manufacturing hub:

- The policy aims to position Thailand as a major regional and global EV production center.

- By 2030, Thailand targets 30% of its total vehicle production to be electric vehicles.

2. Increased EV production capacity:

- Thailand's annual EV production capacity is estimated to reach 400,000-500,000 units in the coming years.

- Major automakers are establishing or expanding EV production facilities in the country.

3. Attraction of foreign investment:

- The policy has already drawn significant investments from Chinese EV manufacturers like BYD, Great Wall Motor, and Changan Automobile.

- Other global automakers are likely to increase their EV-related investments in Thailand.

4. Development of local supply chain:

- The policy encourages localization of EV component production, including batteries.

- By 2026-2027, imported EVs must be offset by locally produced units at specified ratios (1:2 and 1:3).

- This is expected to strengthen the domestic EV supply chain over time.

5. Shift in industry composition:

- The automotive industry will gradually transition from traditional internal combustion engine vehicles to EVs.

- This will require adaptation and potential restructuring for existing auto parts manufacturers.

6. Export opportunities:

- As production capacity grows, Thailand aims to become an EV export hub for the ASEAN region and beyond.

- Annual EV exports are projected to reach around 100,000 units initially.

7. Technological advancement:

- The policy encourages investment in automation, robotics, and EV-related technologies.

- This is likely to boost overall technological capabilities in the automotive sector.

8. Challenges and competition:

- The industry will face intensifying competition, particularly from Chinese manufacturers.

- There may be periodic supply chain disruptions, especially related to semiconductor shortages.

- The development of charging infrastructure will need to keep pace with EV adoption.

9. Workforce transformation:

- The shift to EV production will require reskilling and upskilling of the automotive workforce.

- New job opportunities in EV-related fields are likely to emerge.

10. Environmental impact:

- The policy aligns with Thailand's commitment to reduce carbon emissions and transition to a low-carbon economy.

- This may lead to broader changes in energy and environmental policies affecting the automotive sector.

In conclusion, the EV 3.5 policy is set to fundamentally reshape Thailand's automotive industry over the long term, transitioning it from a traditional auto manufacturing base to a key player in the global EV market. While this transformation presents significant opportunities, it also brings challenges that will require ongoing adaptation and strategic planning from both industry players and policymakers.

Electric Vehicle consumer making purchase decisions


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