Japanese auto giants to invest $4.34 billion in Thailand's electric vehicle transition

In a significant development for Thailand’s automotive landscape, major Japanese auto manufacturers are set to inject a substantial sum of 150 billion baht into the country over the next five years. This move aims to bolster Thailand’s pivot towards electric vehicles (EVs), according to a statement by a Thai government spokesperson on Monday, 25 December 2023.

Toyota Motor and Honda Motor are each poised to contribute around 50 billion baht, while Isuzu Motors plans to invest 30 billion baht and Mitsubishi Motors 20 billion baht. The spokesperson, Chai Wacharoke, confirmed that this investment will encompass the production of electric pickup trucks.

Thailand Prime Minister Srettha Thavisin, who recently concluded a trip to Japan, welcomed this substantial commitment from the Japanese automakers. Thailand, with the second-largest economy in Southeast Asia, is the leading car producer and exporter in the region. Japanese manufacturers have long dominated the Thai auto sector, but the landscape is shifting as Chinese EV makers make substantial inroads with large investments.

Chai Wacharoke emphasized that the investment by Japanese automakers aligns with the government’s policy of transitioning from conventional combustion engine vehicles to electric ones. Despite attempts to obtain comments from Toyota, Honda, Isuzu, and Mitsubishi, none responded immediately.

Thailand has set an ambitious target to convert approximately one-third of its annual production of 2.5 million vehicles into electric vehicles by 2030. To incentivize further investment and facilitate the transition to EV manufacturing, the government is preparing a range of incentives, including tax cuts and subsidies.

Already, Thailand’s attractive offerings have enticed several Chinese carmakers, such as BYD and Great Wall Motor, both committing to invest $1.44 billion in new production facilities in the country.

In a separate development, Prime Minister Srettha showcased potential industrial estates to executives from U.S. EV maker Tesla in early December, highlighting Thailand’s eagerness to draw further investments in the rapidly evolving electric vehicle sector.