Electric vehicles rock Thai auto industry

THAILAND’S strategy of being the Detroit of the East is at risk if both the public and private sectors are not ready for emerging technology which is seeing electric vehicles replace current autos equipped with internal combustion engines, Dr Anusorn Tamajai, Rangsit University’s vice president for research and academic service said today.

Currently Thailand is the world’s ninth largest manufacturer of autos for export with 2 million vehicles produced annually. Of this total 1.2 million are exported and 800,000 sold within the country.

dr-anusornFuturist Tony Seba foresees that vehicles of the type that Thailand currently produces may not be sold at all in five to six years but Dr Anusorn thinks it could last longer than that and still be in use up to five to 10 years.

Meanwhile one-third of the Thai stock market is made up of share values of energy-releated companies such as natural gas, lignite, oil refineries, petrochemicals as well as auto and auto parts industries.

Clearly if auto and auto part industries do not make this major adjustment then it might have an impact on the overall stock market value, he added

In replacing the current autos with electric ones there are several long term economic benefits including the opening of a lot of new economic opportunities, improving the environment and pollution, reducing global warming, improving people’s health and hygiene and reducing fuel imports.

Dr Anusurn estimates that the economic benefit from this switch would be around 10 to 60 billion baht. However electric vehicles might not be successful in the Thai market without special supportive measures because electricity rate has to be much cheaper than the petrol price due to an electric vehicle’s battery lasting only eight years which will drive down the price of these vehicles in the resale market.

Dr Anusorn suggested that the government set up a special committee to study both positive and negative impact of emerging technology on the overall economy, the auto industry and other related industries and this committee should also focus on supply chain.

The promotion of electric vehicles should be done in tandem with eco-car and energy-efficient vehicle production in order to prevent those who have already invested in these projects from losing advantage or alternatively helping them adjust to the emerging technology.

The authorities should also have a special unit to oversee the quality of electric vehicles and charging stations as well as other businesses related to this emerging technology.

Moreover a study should be undertaken and measures prepared to shoulder the impact on the labor structure, the labor market with courses introduced to improve workers’ skills.

There should also be measures to control the impact on agriculture-related bio-energy such as sugar cane, cassava and palm oil.

Aside from this a smart grid should be put in place to ensure good electricity usage.

“The impact on the auto parts industry during the first 10 to 20 years is not substantial therefore this industry has to greatly adjust during this period,” Dr  Anusron said.

The authorities should also have a clear direction in supporting electric vehicles and not switch back and forth. Tax incentives should be introduced to attract well-known electric auto manufacturers to set up plants here.

Should the authorities want this industry to grow then it should open the door to free movement of skilled labor and technicians but this should be done carefully because it could have an impact on the Thai labor market.

“A smart grid should be in place both nationally and regionally which will lead to electric vehicles moving to neighboring countries.

“A target should be set on the number of electric vehicles to be produced, the installation of basic supportive infrastructure as well as supporting research on batteries with the aim to start producing electric vehicles in 2017,” Dr Anusorn said.

The government should also be prepared for the impact of disruptive technology on industries, economic and political systems and the society and people’s lifestyle. One example is  the impact of Fintech on the financial system and economy, Dr Anusorn added


TOP: A beautiful Tesla 17 electric vehicle which this photographer’s friend had purchased. Photo: Joe Nuxoll (CC-BY-2.0)

INSET: Dr Anusorn says Thailand should start producing electric vehicles next year.

By Thai Residents reporters


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