Thailand’s Newly elected Prime Minister Srettha Thavisin, announced on Thursday that he met with Tesla CEO Elon Musk in New York and discussed the electric vehicle (EV) industry and investment.
Thailand, Asia’s fourth-largest car assembly hub, has been extending incentives to EV and battery manufacturers, as well as tax breaks to local EV purchasers, in order to maintain its position as a regional auto centre.
Mr Srettha, who is in New York for the 78th United Nations General Assembly (UNAG), said he chatted with Musk about Tesla and his rocket and satellite company SpaceX, which includes the internet venture Starlink.
“We look forward to further discussions,” Mr Srettha, a former business mogul, said on the messaging site X, which was once known as Twitter.
The Thai government said in a statement that Mr Srettha told Musk in a video conference that his administration was willing to encourage investments within the existing incentive structure.
“Tesla praised Thai human capital, which was suitable for investment,” according to the statement.
Toyota and Honda are two automakers having Thai plants. The country produces 1.5 million to 2 million vehicles per year, with almost half of them exported.
EVs have been progressively gaining ground in Southeast Asia, where Japanese automakers dominate the market. According to Counterpoint Research, EVs accounted for 6.4% of all passenger car sales in the region in the second quarter, up from 3.8% in the first.
Thailand accounts for over half of all regional EV sales, followed by Vietnam and Indonesia, with Chinese automakers like as BYD dominating by a significant margin.
Last year, Tesla, which is also popular in Thailand, debuted models in the expanding market. According to Counterpoint, Southeast Asia accounted for less than 1% of Tesla’s global sales.
According to the Federation of Thai Industries (FTI), sales of battery electric vehicles (BEVs) are expected to exceed 60,000-70,000 units this year, exceeding the target of 40,000 units, as demand soars despite banks enforcing stricter loan criteria, which threatens domestic car manufacturing.
According to Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the FTI’s Automotive Industry Club, EV imports from China are pushing BEV sales, with new models and marketing campaigns enticing purchasers.
“Chinese BEVs have dominated the EV market in Thailand, and sales are expected to increase,” he said.
The club anticipates that there will be more locally manufactured EVs on the market next year. The quantity of EVs assembled at Thai facilities is currently minimal.
According to Mr Surapong, the club considered modifying Thailand’s auto manufacturing target in November due to an increase in EV imports from China, as well as a more challenging environment to obtain a loan for a car.
Imported EVs had an impact on domestic production of internal combustion engine-powered cars, which is declining as electric mobility technology becomes more widespread.
Concerns about excessive household debt and subsequent non-performing loans had also prompted commercial banks to be more cautious in making loans.
Domestic automobile sales declined 11.6% year on year to 60,234 units in August, according to the club, with pure pickup sales down 36.3% to 19,561 units.
The drop was primarily due to banking institutions’ tougher loan-granting criteria.
However, total car sales in the country increased by 6.2% year on year to 524,784 units from January to August.
If the club has to revise its 2023 projection for the country’s auto manufacturing, the new objective will be lower than 1.9 million units, due to a reduction in domestic car output.
Previously, the club decreased its automobile manufacturing target to 1.9 million, down from 1.95 million, as domestic car sales slowed after banks’ decision to be more stringent in giving car loans.
Car output for the domestic market is forecast to fall to 850,000 units, down from 900,000 units previously projected, while export production stays stable at 1.05 million vehicles.
Car exports surged 29.4% year on year to 87,555 units in August, owing to fresh purchase orders from Australia, the Middle East, Europe, North America, and South America. Car exports increased by 19.5% year on year to 724,423 units from January to August.