ASEAN Investments: Challenges and Opportunities in Thailand’s EV Market Growth

Thailand is experiencing an unprecedented boom in electric vehicle (EV) adoption. Examining this trend from the consumer’s perspective reveals significant challenges. While EV adoption is gaining momentum globally, Thailand’s EV market faces specific hurdles, such as concerns over driving range, maintenance center accessibility, and charging infrastructure. Identifying these challenges also highlights opportunities for investment in addressing these issues.

This article explores the challenges of EV adoption in Thailand and the investment opportunities that arise from them, offering valuable insights for those interested in ASEAN investments.

Challenges of EV Adoption in Thailand from the Consumer Perspective

Despite the global trend toward EV adoption, Thailand faces specific barriers. Let’s take a look to the key factors causing hesitation among Thai consumers regarding EV transition.

When asked, Thai consumers cite three major concerns regarding EV adoption: driving range, maintenance center accessibility, and charging infrastructure:

Driving Range
Concerns about driving range stem from fears of running out of power before reaching a charging facility, driven by initial impressions or psychological perceptions. Most new EV models can travel an average of 300 km per charge, and two-wheelers (2Ws) average 100–150 km. Educating consumers about factors affecting range (e.g., climate, aggressive acceleration, regenerative braking) is crucial for building confidence in EVs.

Maintenance Center Accessibility
In the four-wheeler (4W) passenger vehicle segment, battery warranties vary from 5 to 10 years, depending on the brand. EV manufacturers recommend annual or biennial battery checks, but Thailand’s hot climate may necessitate more frequent inspections. Although many EV owners rely on dealership maintenance during the warranty period, independent repair shops equipped to handle EV-specific repairs remain scarce.

Charging Infrastructure
Charging infrastructure plays a critical role in EV adoption. Unlike other EV-friendly countries, home charging is not yet widespread in Thailand due to building regulations, safety concerns, and limited parking spaces in residential complexes. Many users rely on public charging stations, which are basically only available in urban or tourist areas. As of now, Thailand has 1,795 DC fast chargers nationwide. To meet growing demand, the Thai EV Policy Committee has set ambitious goals to expand DC chargers to 2,200–2,400 units by 2025, 12,000 by 2030, and 36,500 by 2035.

Besides the three concerns mentioned above, the following five points are also considered key issues for the adoption of EVs:

Price
Until a few years ago, price was cited as the biggest obstacle to EV adoption. Currently, thanks to government support measures such as reductions in import taxes and EV purchase subsidies, the price gap between ICE models and EV models, especially for four-wheelers (4Ws), has significantly narrowed. Additionally, many international brands have established battery assembly plants and local EV manufacturing factories with government subsidies, and it is expected that the price gap will further decrease in the coming years. On the other hand, “price” remains an important consideration for many consumers, and government subsidies and support measures that make EVs more affordable may not be widely known to many consumers.

Variety of Models
According to the International Energy Agency (IEA), in 2022, 66 EV models were sold in Thailand, consisting of 48 large models and 18 small- to medium-sized models. In contrast, in China, more than 94 brands offer a total of over 300 models, with price ranges spanning from USD 5,000 to USD 90,000, catering to diverse consumer needs. The limited options currently pose a challenge for Thailand, but it is expected that this will be resolved with the expansion of local production of EVs and batteries in the coming years.

Resale Value
It is commonly recognized in the automobile market that the value of EVs depreciates quickly. Particularly for EVs, which are still a relatively new category, accurately predicting future value is difficult. In any market, resale value is influenced by factors such as demand, battery lifespan, and proper maintenance. Moreover, since rapid chargers generate a lot of heat, the lifespan of battery packs may shorten with years of use, potentially reducing their energy storage capacity. In Thailand, aside from these concerns, the limited availability of models and the restricted range of older EVs are factors contributing to low demand in the resale market.

Insurance Premiums
As EV adoption grows, the rising repair costs and potential shortage of parts in Thailand have increased EV insurance premiums. Additionally, due to insufficient past usage data and damage statistics for EVs, insurance companies charge 20–30% higher premiums compared to ICE vehicles. However, as EV adoption progresses, insurance companies may improve premiums and coverage for EV owners to enhance competitiveness. Furthermore, with the Thai government’s policies to promote local production, the prices of EVs and parts are expected to become more affordable. Encouraging knowledge of EV repairs is anticipated to improve access to specialized EV service centers, potentially reducing repair costs and insurance premiums.

Consumer Awareness
Consumers who are familiar with the functions and benefits of EVs are more likely to consider purchasing them, even if the price is somewhat higher. However, as the EV market in Thailand is still in its growth phase, further adoption will require consumer education from both the government and brands.

Investment Opportunities in Different EV Segments

EV Component Suppliers
As ASEAN’s major automobile manufacturing hub, Thailand boasts a reliable and diverse supply chain network that includes Tier 2 and Tier 3 suppliers. Currently, there are over 2,000 Tier 1, Tier 2, and Tier 3 automotive component suppliers, many of which are local companies. The Thai government’s “30@30” initiative and EV-friendly policies are driving investment in the local EV and battery manufacturing industries, offering new opportunities for automotive component suppliers. As domestic EV demand and export potential grow, the automotive supply chain is preparing to meet the increasing demand for EV components. However, batteries—one of the key EV components—are still reliant on imports due to limited local production capacity and expertise. The new Thai government is reviewing subsidy packages for battery assembly and manufacturing, presenting significant opportunities for potential battery manufacturers to participate in module or “cell-to-pack” assembly for EV OEMs across various vehicle segments. EV OEMs are targeting the Thai government’s new annual sales goals for 2030 (E4W: 440,000 units (50% adoption), E2W: 650,000 units (40% adoption), EV buses and trucks: 33,000 units (35% adoption)), intensifying competition.

Charging Infrastructure
As of May 2023, Thailand had 2,833 AC chargers and 1,795 DC chargers, most of which are concentrated in Bangkok and its surrounding areas. With the Thai government aiming to install 12,000 fast chargers by 2030, the charging infrastructure sector holds significant growth potential. Currently, the E2W and E4W charging station market is served by 13 companies, with the top 5 (EA Anywhere, EV Station Pluz, Evolt, ReverSharger, and PEA Volta) accounting for over 70% of the chargers in the market. In recent years, additional investments in joint ventures have been observed, aimed at expanding DC fast-charging stations.

E2W and E4W
Relevant companies and potential investors can enhance the charging experience for customers by introducing value-added services. For example, providing quick maintenance checks, battery condition assessments, brake system inspections, tire inflation, or software updates at or near charging stations can greatly enhance the overall customer experience. Additionally, loyalty programs that allow customers to accumulate points for discounts on charging services or at partner convenience stores can be considered.

EVバスとEVトラック
EVバスとEVトラックは通常私設車庫で充電され、200～300kmの比較的短いルートを走っています。数少ない大型充電ステーションは、物流用の高速道路や地方間ルートに配置されています。タイ政府の支援政策により重量級EVモデルの需要が刺激されている中、バスおよびトラックの運営者はより手頃な価格で幅広い種類のEVを手に入れられることが期待されています。この変化は、投資家の関心を私設車庫充電から重量級商用車向けの公共充電インフラへと誘導させ、さらなる投資を促す可能性があります。その高速充電器への追加投資は固定ルートのバスや物流トラックの長距離ドライブをサポートするのにとても重要です。充電ネットワークを最適化するには、EVのOEM、バスとトラックの運営者や充電ステーションの運営者との協力が不可欠です。

EV Buses and EV Trucks
EV buses and trucks are typically charged at private depots and run relatively short routes of 200–300 km. A limited number of large charging stations are strategically located along highways for logistics use or inter-regional routes. As Thai government support policies stimulate demand for heavy-duty EV models, bus and truck operators are expected to gain access to a wider variety of EVs at more affordable prices. This shift may redirect investor interest from private depot charging to public charging infrastructure for heavy-duty commercial vehicles, encouraging further investment. Additional investments in fast chargers will be critical to supporting fixed-route buses and long-haul logistics trucks. Collaboration among EV OEMs, bus and truck operators, and charging station operators will be essential to optimizing the charging network.

Digital Services
EV drivers often face challenges with various charging scenarios. A common issue is the need to use different apps for charging stations of different brands. To address this, it is worth considering developing or investing in integrated apps or digital services that allow users to locate all brands’ charging stations, reserve charging slots, and make smooth payments regardless of the charging station brand. Such apps, which can identify charging facilities near the user’s current location or destination, would be highly beneficial for EV drivers. Additionally, providing real-time queue information could help drivers estimate waiting times and improve overall regional charging management.

Summary

As in other regions, addressing consumer concerns is key to promoting EV adoption in Thailand. Solutions are needed in various areas, from dispelling misconceptions about range through thorough customer education, improving access to service centers, and strengthening charging infrastructure networks. While the Thai government pushes for its goal of becoming a regional hub for EV production, related businesses in components, charging infrastructure, vehicle manufacturing, and digital services have investment opportunities to contribute to Thailand’s evolving EV market. Whether for overseas expansion or foreign investment, Thailand’s growing EV boom is worth watching closely.

Source: YCP Solidiance, “Dominating SEA’s EV Revolution: The Ultimate Guide to the EV Market in Thailand,” December 2023