Thailand’s EV market faces sharp sales declines in 2024, with Chinese firms struggling with subsidy challenges and unsold stock. Despite global backlash and consumer doubts, hope remains for recovery, driven by new tech, infrastructure growth and urban transport needs.
Thailand’s nascent EV car sector is still reeling from a slowdown in sales since February 2024. The industry presently expects sales of EV vehicles to be just ahead of those seen in 2023. Chinese firms are caught between the prospects of repaying past subsidies on one hand while producing vehicles despite already having unsustainable numbers of unsold vehicles in stock, on the other. Nevertheless, despite this year’s backlash, led by consumer mistrust worldwide, there is still a market for EV cars. Sales this year in Thailand will account for 14% of the market, while sales have risen in the United States in the third quarter.
Thailand’s motor industry, this week, showcased its wares at IMPACT Muang Thong Thani during the Motor Expo 2024. However, those attending had little to celebrate, particularly in the EV market.
Certainly, it comes as a bit of a surprise considering how the year began with impressive numbers. Indeed, it appeared as if 2024 would be another record year for EVs. For instance, early in the year, the new class of electric cars with fast acceleration, expected to build on a massive 684% surge in sales in 2023.
Of course, it didn’t last. February saw sales slump from 13,653 units in January to just 3,635. While the market rallied later, figures since August have been sharply below those of 2023.
Steep declines in Thailand’s EV market since August 2024 highlight challenges for automakers and buyers alike
Firstly, in August, they fell 3.3%, from 6,611 units in 2023 to 6,395 this year. In September, the decline was even sharper, with sales dropping from 6,875 to just 4,597, a steep 33.12% decrease. October 2024 was worse, with sales falling from 7,724 last year to 4,954—a nearly 36% drop.
Undoubtedly, sales of all cars have fallen, but the slump in EVs has been more pronounced. Certainly, this is due to bad press and rejection by consumers in Western markets.
However, it would be wrong to write off the EV revolution prematurely. In Thailand, hybrid cars are still favoured, just as in other markets. Yet, the marketplace indicates there is certainly a place for EVs.
Government policies attempting to force EV adoption according to a green or climate change agenda are not working. EVs in Thailand have suffered this year, partly due to difficulties in finding insurance for the vehicles.
Furthermore, surveys by global consultant McKinsey show consumer dissatisfaction with EV products worldwide. A shocking survey this year revealed that 46% of EV owners are likely to switch back to ICE (Internal Combustion Engine) cars.
Global EV sales trends highlight regional disparities, with U.S. gains contrasting with declines elsewhere
Sales have similarly fallen in Europe, Scandinavia, and Australia. However, in the third quarter, EV sales in the United States rose by 11%, with 346,408 vehicles sold, accounting for 8.9% of the market. This was up from 7.8% in 2023.
Essentially, EVs are very suited to urban centres. At the same time, they are seen by many as cleaner—not just in terms of climate change emissions but regarding local smog and pollution.
For instance, despite the decline in Thailand, there is increased use of EVs as part of the taxi network. This is particularly so in Bangkok, where generous support is available for taxi drivers working with online app systems. Additionally, the same model is being successfully applied to motorbike taxis using electric bikes.
Nonetheless, another key factor is confusion in the marketplace caused by EVs. In short, this has led buyers to delay new car purchases.
EV market confusion and economic uncertainty fuel car sales plunge across all segments in Thailand
This factor is perhaps underestimated in Thailand, as overall car sales have plunged. The industry blames it on a poor economy, tight bank credit and uncertainty caused by the arrival of EVs.
At the same time, government programmes and indecisive laws in Europe and elsewhere are having a severely detrimental impact on car purchases, undeniably shaking the foundations of the automotive industry.
In Thailand, there is a new Chinese-led EV industry. However, it presently faces an acute dilemma. Recent reports suggest many firms are considering withdrawing from government subsidy support programmes.
Chinese manufacturers face subsidy repayment risks as EV 3.0 programme challenges market feasibility
Significantly, under the terms of these programmes, the firms may face fines and repayment of past subsidies, along with waived import duties and other concessions.
In short, the government’s EV 3.0 programme requires Chinese manufacturers to build one EV domestically for every one imported in 2024. This will rise to a ratio of 1:1.5 in 2025.
In recent months, Chinese players have been in discussions with the Thai government, appealing for flexibility in their case.
Currently, under the scheme, subsidies of up to ฿150,000 have been paid on each vehicle priced at up to ฿2 million. Similar incentives are in place for electric motorbikes.
Nonetheless, figures released this week by the Federation of Thai Industries (FTI) Automotive Industry Club paint a grim picture.
The FTI data shows EV sales in October were just 3,717—a precipitous fall of 49.7% compared to 2023. These figures were quoted by Mr. Suroj Sangsanit, President of the Electric Vehicle Association of Thailand (EVAT).
ICE vehicle sales also plunge while EV foundation grows amid manufacturing resilience in Thailand
Meanwhile, ICE vehicle sales fell by approximately 27.8% to 11,562 units in October. Simultaneously, Thailand’s critical automotive industry experienced a 19.28% decline in output during the first 10 months of the year. Nevertheless, it still managed to manufacture 1,246,868 units.
Certainly, given the global automotive industry’s uncertainty, this figure demonstrates some resilience. Furthermore, despite the failure of the EV sector to take off as planned, there is now a strong foundation for these vehicles in Thailand.
At this time, EV sales in the opening 10 months are marginally ahead of 2023, at 59,327 units—up 2.2%. However, it is unlikely Thailand will match last year’s final tally of 76,314 vehicles. Nonetheless, the industry is still projecting 82,000 units sold.
This would give EVs a market share of 14%, up from 12% last year.
Future EV prospects buoyed by infrastructure developments and new battery technologies
Despite the unsettling and challenging year for EVs in 2024, there is some positive hope for 2025 and 2026.
Analysts suggest a faster rollout of infrastructure and charging points has helped EV sales in the U.S. in Quarter three. Certainly, this may also help in Thailand.
An old man smashes an EV car through a car park wall and tumbles to the ground wheel up on Monday. Survives
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However, ultimately, the key to success for EVs lies as an urban transport solution for pollution control. In addition, EV vehicles enjoy quite an impressive acceleration on the road. Furthermore, there is speculation that new battery technology is imminent.
At length, this involves replacing graphite in batteries with silicon anodes, reportedly capable of extending battery range by 25-50%. In turn, this will also allow for a full charge in under 10 minutes.
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Further reading:
EV sector crisis as Chinese firms are trapped between lack of demand and government tax penalties
Thailand changes tack as EV revolution turns into a damp squib with warehouses full of unsold cars
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Disturbing questions that must be confronted over Thailand’s reeling economy are China and EV cars
First-quarter GDP growth surprises analysts based on higher tourism and consumer spending growth
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