Nissan Motor’s Thai subsidiary, Nissan Motor Thailand, said it would focus increasingly on producing hybrid electric vehicles (HEVs) in response to new investment incentives announced recently by the Thai government, according to local reports.
The Thai government’s Board of Investment (BOI) last week announced it would make available new investment incentives to local manufacturers of HEVs to boost production in response to rising global demand and the slower than expected adoption of BEVs globally.
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According to local reports, manufacturers of HEVs would enjoy a fixed excise tax rate of between 6% and 9% between 2028 and 2032, depending on CO2 emission levels, if they invest a minimum of THB3bn (US$85m) between 2024 and 2027. The new incentives would also cancel out the government’s existing plan to increasing vehicle excise taxes by 2% every two years.
The country was already committed to incentivising domestic battery electric vehicle (BEV) production with several Chinese automakers having already opened BEV factories and more scheduled to follow in the next two years.
The Thai government currently offers subsidies of up to THB100,000 (US$2,820) for BEV purchases under its EV3.5 programme, launched at the beginning of 2024, as part of a package of incentives aimed at establishing Thailand as an international production hub for BEVs.
BEV sales in the country rose by 24% to 49,281 units in the first half of 2024, after surging sevenfold to around 73,000 units in 2023, while overall vehicle sales fell by 24% to 308,027 units in the same period. So far, most BEVs sold in the country were imported from China.
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By GlobalDataBy contrast, sales of pickup trucks, the backbone of Thailand’s automotive industry, dropped by 40% to 89,581 units year to date (YTD) while sales of pickup-based passenger vehicles (PPVs) plunged by 44% to 18,856 units.
The government had set a target for BEVs to account for around 30% of overall vehicle production by 2030 which was forecast to rise to 2.5m units from 1.84m in 2023.
The government had come under increasing pressure to provide support for Thailand’s struggling components manufacturers which were heavily dependent on ICE vehicle production such as pickup trucks, and saw hybrid vehicle incentives as a way to support the industry as it transitions to zero emission vehicles.
BOI secretary-general Narit Therdsteerasukdi said in a statement the new incentives “will support the transformation of Thailand’s automotive industry towards vehicle electrification and the development of the overall supply chain. Thailand has the potential to become a manufacturing hub for various types of electric vehicles, including both vehicles and components”.
Toshihiro Fujiki, Nissan Motor Thailand’s newly appointed CEO, said the company “plans to launch five models between 2025 and 2027 and we are currently considering which models will be made in Thailand”.
Nissan sold 16,400 vehicles in Thailand last year, down from 22,500 in 2022, while its sales network has shrunk to 141 outlets from 161 at the end of last year.
