Thailand is aiming to become a global hub for the production and supply of electric vehicles (EVs). The country has undertaken several policy initiatives aimed at boosting the supply chain of EV production, providing fiscal incentives for the adoption and operation of electric buses, and encouraging local bus providers to establish and promote e-bus manufacturing. Overall, Thailand plans to invest USD12.08 billion to support the production of 1.2 million EVs and charging stations by 2036. This includes cars, two-wheelers, buses, and freight vehicles. In the public transit sector, the incentives focus on private and publicly operated electric buses. The government plans to develop, deploy, and operate 40,000 electric buses in the next 10 years in the country.
Key EV Policy Initiatives in Thailand
National Electric Vehicle Policy Committee’s road map, 2021–2035
Thailand’s National Electric Vehicle Policy Committee has set the vision for the country to become a global hub for the supply and production of EVs and automotive parts. The road map has set a target of 30 per cent zero emission vehicle (ZEV) production by 2030 and a target of 100 per cent ZEV sales by 2035. With these targets, Thailand is expected to produce and sell 33,000 units by 2030. The government is offering a five-year corporate income tax exemption for EV charging operators that build at least 40 chargers to support e-mobility and EV infrastructure nationwide.
Ministry of Transport’s EV Development Plan, 2022–2037
The EV Development Plan, 2022–2037 outlines the government’s intention of deploying 4,412 EV buses in the Bangkok Metropolitan Area by 2030. Out of these 4,412 buses, the Bangkok Mass Transit Authority (BMTA) plans to replace 2,511 existing conventional buses with EV buses. Additionally, BMTA is planning to announce a service contract for operating 1,500 EV buses. As part of the development plan, the Department of Land Transport approved EV bus concession agreements for operations on 13 routes in Bangkok and Bangkok Metropolis area in 2022.
Fiscal incentives and subsidies for electric buses
For electric buses, the Board of Investment of Thailand (BOI) announced promotional packages in 2022; these packages include a three-year corporate income tax exemption. Additionally, a one-year exemption for manufacturers was initiated incase of production of batteries within three years of the issuance date of the promotion certificate to facilitate module production. Lastly, an exemption of one to three years was granted for the research and development (R&D) phase of new prototypes. To promote the uptake of EV buses, the government provides a 50 per cent tax rebate on the annual vehicle tax for EV buses as compared to internal combustion engine (ICE) buses. As per the Land Transport Act, the annual tax for EVs has been reduced to TBH1,450 against the annual tax of TBH2,900 for ICE buses. The incentive package will attract local bus manufacturers and hence aid in achieving the production targets set by the National Electric Vehicle Policy Committee.
Impact of EV Policies: recent developments
- At the national level, Thailand aims to replace 40,000 existing diesel-powered buses with electric buses in the next decade. By the end of 2021, the total number of registered buses in Thailand stood at 151,550.
- Bangkok is leading the way in the transition to e-buses in Thailand. The Department of Land Transport has granted service contracts to private operators for e-bus operation on 77 routes in the Bangkok Metropolitan Region. Thai Smile Bus, the private bus operator in Bangkok, has been awarded a contract to operate on 71 out of these 77 routes; currently, it is operating with a fleet of 1,250 e-buses. Thai Smile Bus is targeting to expand its EV bus fleet to 3,100 buses and to operate on all 122 bus routes by the end of 2023.
- Currently, BMTA operates 119 public bus routes with a total fleet of 2,885 buses. In addition, BMTA will provide EV buses to other operators that have been awarded contracts to operate 53 bus routes of the 119 routes in Bangkok. The Ministry of Transport plans to have an additional 1,850 e-buses operate on the remaining 45 routes.
- Additionally, the Government of Thailand and the Government of Switzerland have launched the Bangkok E-Bus Programme under which 2,000 EV buses will be deployed in Bangkok by 2030. The initiative is a carbon-emission trading agreement wherein Switzerland-based KliK Foundation will purchase the carbon reductions generated by Thailand-based Energy Absolute.
While Thailand is implementing regulatory reforms to set up the supply chain for the production and adoption of EVs, including e-buses, there is no complementary policy or strategy for the implementation of charging infrastructure to support this transition. As of 2021, Thailand had 693 public charging stations. This rate of penetration is far behind those of other Asian countries that are also making strong efforts to transition to EVs. While the government has rolled out fiscal incentives to benefit the operators of charging stations, there is a need to develop business cases for commercially viable charging facilities to encourage mass adoption.
At present, programmes for the adoption of e-buses are focused on the Bangkok Metropolitan Region. There is a need for national programmes and strategies to facilitate the adoption of e-buses in other cities and in rural areas. Thailand has set itself the target of becoming a pioneer in the manufacturing of EVs. However, the focus so far has been primarily on the production of private vehicles. Additionally, the policy directives and actions currently prioritise the replacement of existing fossil fuel-based fleets to electric. For a long-term sustainable solution, it is important to increase the electric bus fleet by making buses and public transit more attractive and to disincentive the use of private vehicles.
Thailand plans to convert only 40,000 of the 155,000 buses in the nation’s bus fleet to electric in the next ten years. Adopting a more ambitious target will need more focused directives from the government on increasing the country’s domestic manufacturing capacity for electric buses.
The way forward
Thailand has established the necessary regulatory framework and implemented the required policy reforms for the transition to electric mobility. The country should reconsider the electrification target for bus transit service with a focus on initiatives encouraging the adoption of e-mobility in rural areas and for inter-city travel. Thailand intends to provide a favourable ecosystem for local bus manufacturers, as seen in its fiscal incentives focusing on tax rebates and production subsidies. Along with efforts aimed at encouraging e-bus manufacturing, Thailand needs to develop and expand the charging infrastructure. The government should facilitate the involvement of the private sector in the implementation and operation of charging infrastructure and other transit activities by developing business cases for private sector involvement.