Thailand's EV demand expected to grow from government incentives: DBS

DBS Group Research expects a greater demand for electric vehicles (EVs) in Thailand on the back of the government's incentives to encourage the use of such cars.

In a report on Feb 18, DBS analyst Duladeth Bik said he expects a rise in demand for EVs going forward as he projects that cost of EVs will reduce by 200,000 baht (S$8,391) per unit for car buyers. He also noted that with the availability of EVs in Thailand, about half are priced at less than 2 million baht per unit.

This comes after the Thai government approved EV incentive packages for 2022 and 2023 which include import and excise tax cuts and subsidies for both 2 and 4-wheel EVs.

Apart from EV users, Bik projects that Thailand EV players will benefit from these incentive programmes as well. He believes demand for EV cars, charging points, batteries and parts will "drive up".

Beneficiaries of the EV incentive programmes include upstream players selling lithium-ion batteries and battery modules and midstream players selling semiconductor chips and spare parts, the analyst said.

Downstream players selling EV assembly plants, EV charging points, energy storage systems and maintenance services will also benefit from the incentives, added Bik.

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The analyst believes that electric power generation company Energy Absolute would benefit the most from the government incentives as it is an integrated battery business, providing products from upstream to downstream.

Bik highlights that this comes amid an uptrend in Thailand's EV imports, in quantity and also in the variety of EV models. He said newly registered light duty vehicles grew 38 per cent year on year in 2021.

Additionally, data compiled by the Electric Vehicle Association of Thailand shows that total EV sales grew at a compound annual growth rate of 24 per cent from 2016 to 2021, the analyst added.