BANGKOK: As sales of electric vehicles miss expectations in Southeast Asia’s largest business, Thailand’s major group of manufacturers, comprising big Chinese and Japanese firms, seeks to expand production deadlines set in a government scheme of incentives.
Thailand’s regional hub for developing electric vehicles ( EVs ) is made up of more than US$ 1.44 billion in new production facilities from Chinese EV car makers like BYD Motors and Great Wall Motor.
The Electric Vehicle Association of Thailand ( EVAT ) is asking the government for more time to meet targets in the main incentive program supporting the industry as sales decline, partially as a result of Thai banks ‘ tightened loan requirements.
” We’re trying to communicate, extend the production time out a much”, the grouping’s leader, Suroj Sangsnit, told Reuters, outlining a plan that has not previously been reported.
” The requirements say we must make within a year, but can we beg for another year”? added Suroj, the executive vice president of SAIC Motor-CP, a cooperative venture of SAIC Motor and Thailand’s CP Group.
According to the EV 3.0 program, businesses receiving tax cuts and other funding were required to produce in Thailand this year the same amount of cars they imported between 2022 and 2023.
Due to the scheme’s requirement to produce 1.5 cars for each imported vehicle, they are given a tougher task next year if they do n’t meet the deadline.
Big Chinese companies pushing for the shift include BYD, MG Motor, which is owned by SAIC Motor Corp, and Great Wall Motor, Suroj said.
Reuters contacted BYD and Great Wall Motor for opinion, but they did not respond.
One strategy in a wider effort by the EV market to maintain lower-than-expected sales is to seek the concession, as part of a meeting with Thai central lender officials this year.
Narit Therdsteerasukdi, secretary-general of the Thailand Board of Investment, which runs the reward program, declined to comment without receiving instruction from the case of new Prime Minister Paetongtarn Shinawatra.
DEBT WOES
Thailand has long been a center for auto production and export, with Chinese manufacturers like Toyota and Honda Motor, both of which are EVAT people.
By 2030, the government’s subsidies for EV manufacturing aim to encourage the conversion of 30 % of the country’s 2 million cars ‘ annual result to electric cars.
New EV sales this month stood at 43, 000 and were likely to miss EVAT’s goal of 100, 000, Suroj added.
They reflect broader declines in Thailand’s auto sector, where vehicle production dropped 17.2 percent in the first seven weeks of 2024 from a year earlier to reach 886 and 069, respectively.
According to Suroj, banks were hesitant to grant EV loans due to the high discount rates that resulted in property prices.
” Great household debt is tightening record, which is going to make it difficult to sell”, he added.
Now among Asia’s highest, Thailand’s common household debt has risen to a report, thanks to slow economic growth, lower incomes and high life costs, a poll showed on Tuesday.
EVAT pushed for state institutions to offer more car loans during its June meeting with the Bank of Thailand, whose details have not been made open.
” An outcome of that meeting was ( that banks ) could calculate income as a family or household when considering loans”, said the grouping’s vice president, Siamnat Panassorn.
A Reuters request for comment was never received by the central banks.