Thailand, historically recognized as a powerhouse for internal combustion engine (ICE) vehicle production in Asia, is now at a crossroads due to the disruptive rise of battery electric vehicles (BEVs). A recent study published in the Asia Pacific Journal of Innovation and Entrepreneurship, led by Patarapong Intarakumnerd from the National Graduate Institute of Policy Studies in Tokyo, delves into whether Thailand can capitalize on this pivotal moment to leapfrog into the future of automotive technology.
The research highlights a crucial insight: while Japanese automakers have long dominated the EV technology landscape, they are now lagging behind their Chinese counterparts, who have successfully leveraged favorable trade agreements to boost their electric vehicle sales. “The incumbents, Japanese and Western, are primarily expanding their production of hybrid electric vehicles (HEVs) and plug-in hybrids,” Intarakumnerd notes. This strategic choice may hinder their ability to transition fully to BEVs, leaving the door open for new entrants.
Interestingly, the study points out that the ICE technology that has historically defined the Thai automotive sector does not pose a barrier for emerging players, including Chinese manufacturers and local Thai companies. These new entrants are not encumbered by legacy production systems and are instead focusing on innovative niches within the EV market, such as non-four-wheel vehicles and supportive infrastructures like charging stations.
Despite Thailand’s success in attracting foreign direct investment (FDI) into the EV sector, the study underscores a significant shortcoming: the country has yet to develop its indigenous technologies related to electric vehicles. The tight integration with Japanese automotive production networks, coupled with an unfavorable Free Trade Agreement (FTA) with China, has stymied Thailand’s ability to leapfrog into the BEV market.
Intarakumnerd emphasizes the implications of this research for the energy sector, stating, “This study sheds light on the limitations of an industrial development strategy that relies heavily on openness to trade and FDI without adequately strengthening indigenous technologies.” The findings suggest that without a robust framework to foster local innovation, Thailand risks missing out on the transformative potential of the BEV revolution.
As the global automotive landscape shifts towards electrification, this research serves as a wake-up call for policymakers and industry leaders in Thailand. It highlights the urgent need for strategic investments in homegrown technologies and partnerships that can elevate the nation’s position in the burgeoning EV market. The insights drawn from this study are not just academic; they could shape the future trajectory of Thailand’s automotive industry and its role in the global energy transition.
For further insights into this important topic, you can explore more from Intarakumnerd at the National Graduate Institute of Policy Studies.