Amid global uncertainty and new opportunities, Bangkok is emerging as a key player in the electric vehicle sector
Di Alessandro Forte
The electric vehicle (EV) sector is one of the most strategic focal points shaping trade relations among the world’s major economies and is the subject of intense international discussion. Marked by increasingly rapid growth, electric vehicle sales in 2023 accounted for approximately 18% of the entire automotive market, a sharp leap from just 2% five years prior. The sector is now projected to reach a market value of $990.4 billion USD by 2029.
Due to its economic, political, and environmental significance, the EV sector has often been the stage for strategic competition among global powers. The People’s Republic of China, which currently holds around 60% of this market, has recently faced tariff restrictions from the European Commission, an attempt to counterbalance the Chinese government’s subsidies to domestic companies. Meanwhile, the sector’s most important private player, Tesla, is seeing a drop in sales in the Chinese market amid intensifying competition from local brands.
While this scenario might suggest a market dominated solely by major global powers, one regional player—Thailand—has quietly gained increasing prominence. Among ASEAN countries, Thailand has shown the most proactive participation in EV supply chains, emerging as a reliable producer and exporter of electric motors, converters, and inverters. Furthermore, Thailand’s “EV 3.0” policy, launched in 2022, significantly boosted domestic EV purchases. Tax incentives have brought the cost of an electric car in line with that of a conventional one, resulting in a 320% surge in sales in 2023. It’s no surprise that Thailand is the regional leader in this sector. As early as 2001, then Prime Minister Thaksin Shinawatra aimed to make his country “the Detroit of the East,” promoting export-oriented policies and investment incentives that turned Thailand into Southeast Asia’s automotive hub.
What is interesting—though not entirely unexpected—is that the biggest beneficiary of Thailand’s favorable policies has been China. More than 20 Chinese automakers, including industry giants BYD and Great Wall Motor, have entered the Thai market, often establishing local production facilities. It’s estimated that Chinese brands now account for more than half of all EV sales in Thailand—a figure likely to grow. While this has bolstered Thailand’s automotive sector, it also raises concerns about overdependence on Beijing. Diversifying the investor base is becoming increasingly necessary.
Now may be the right moment to do so. Last year, Tesla considered establishing a manufacturing site in Thailand to expand its footprint in the domestic market and enhance its reach across Southeast Asia. Although the company ultimately limited its plans to developing charging infrastructure, the idea of a factory remains on the table. Tesla’s Shanghai gigafactory is facing mounting pressure amid the U.S.-China trade conflict: in April, sales of China-made Teslas dropped by 6% year-over-year. Additionally, Tesla has withdrawn its U.S.-made Model S and X from the Chinese market, coinciding with the escalation of the tariff war, though CEO Elon Musk has not officially confirmed a direct link.
In a landscape full of challenges and surprises, Bangkok may find itself in a prime position to attract more favorable investment from U.S. companies, diversify its economic partnerships, and increase its leverage in the global automotive sector. However, it must proceed cautiously, striving for balance in its bilateral relations with both superpowers. Patientia vincit omnia.
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