Japan’s Car Makers to Invest US$4.3 Billion into Thailand’s EV Market

Japan’s top four automakers plan to invest US$ 4.3 billion in Thailand’s electric vehicle (EV) industry over the next five years, according to government spokesman Mr Chai Wacharonke.

He said that Toyota Motor and Honda Motor would each invest roughly $1.3 Billion, Isuzu Motors would invest $866 Million, and Mitsubishi Motors would invest $577 Million, citing Board of Investment data.

Mr. Chai stated that electric pick-up production will increase over the next several years as Japanese automakers invest in Thailand’s transition from combustion engines to EVs.

This followed discussions between Prime Minister Srettha Thavisin and seven Japanese automakers during his visit to Japan last week, where he attended the Commemorative Summit for the 50th Year of Asean-Japan Friendship and Cooperation in Tokyo, according to Mr Chai.

Mr. Chai stated that Japanese automakers have indicated that Thailand will be their key production base in the area and that the Thai government is willing to facilitate their transition to contemporary automobile technology to cut carbon dioxide emissions.

According to him, Japanese automakers have also offered battery-swapping solutions for commercial cars, and the government is eager to promote the business environment here to Japanese investors.

Japan to Play a Key Role

Measures include a visa-free arrangement for short business travels from January 1 to December 31, 2026, to promote commerce, investment, and business between the two countries.

The government believes Japan can assist in pushing and growing businesses that Thailand wants to encourage, such as electric vehicle manufacturing, biomedical research, digital technology, infrastructure, agricultural development, and human resource development.

“The prime minister emphasises that Japanese car manufacturers can play an important role in helping Thailand to become a leader in EV manufacturing in the region,” he said.

“Thailand is keen to cooperate with Japanese carmakers who want to expand investment in the country to create mutual benefits for the EV industries of both countries,” stated a spokesman.

The Federation of Thai Industries anticipates that Thailand will produce 2.5 million vehicles by 2030, with 70% being next-generation cars based on internal combustion engine technology and the remainder being zero-emission vehicles in the EV class.

According to Auramon Supthaweethum, director-general of the Department of Business Development, 612 foreigners gained permission to invest in Thailand under the Foreign Business Act (1999) between January and November, a 15% increase over the same period the previous year.

Thailand’s Infrastructure Development

The foreign investment totalled 98.28 billion baht during the period, a 13% decrease from the previous year, she added, creating 6,086 Thai employment, a 22% rise.

The most international investors came from Japan (129), who invested $869 Million (30.1 billion baht), followed by 95 Singaporeans who invested $641 Million (22.2 billion baht).

Another 95 came from the United States with a $122 Billion (4.23 billion baht) investment, 56 from China with a $456 Million (15.8 billion baht) investment, and 26 from Hong Kong with a 5.8 billion baht investment, according to Ms Auramon.

According to her, most foreign businesses granted permission during the period respond to Thailand’s infrastructure development needs and the government’s policy to increase the country’s competitiveness, such as electric rail projects, software development, online platform development, and petroleum drilling.

The electric vehicle market in Thailand is expanding rapidly. The government has implemented steps to encourage the use of electric vehicles, such as tax breaks and infrastructure improvements.

As a result, more electric vehicle manufacturers and suppliers are joining the market. Furthermore, people are becoming more interested in electric vehicles due to their environmental benefits and cheaper running costs.

This has increased electric car sales, projected to drive further market expansion in the coming years.