Thailand becomes Southeast Asia’s EV powerhouse, but a price war looms

Thailand is on track for a major electric vehicle (EV) sales boom, with demand expected to rise by 40% in 2025. Industry leaders predict over 100,000 EVs will be sold this year, reversing an 8% drop in 2024. But experts warn that the surge in production could spark a fierce price war, squeezing profit margins in an already struggling auto market.

The sharp increase is fueled by a national incentive programme that requires automakers to produce 1.5 local EVs for every imported unit. Companies that fail to meet this target face hefty penalties. The policy, alongside government subsidies of up to 150,000 baht ($4,400) per car, has cemented Thailand’s status as Southeast Asia’s largest EV market, with 70,000 new EVs registered last year.

Aggressive Price Cuts Threaten Market Stability

While the incentive programme has boosted production, it has also intensified price competition. Chinese automakers, which dominate Thailand’s EV market, have already begun slashing prices to stay competitive. Great Wall Motor cut the price of its Ora Good Cat model by 270,000 baht ($7,500), while GAC AION reduced the cost of its AION Y Plus by 166,000 baht ($4,600).

“Price wars will be prolonged, aggressive, and more widespread,” warned Tita Phekanonth, a senior analyst at Siam Commercial Bank’s Economic Intelligence Unit. She added that even traditional petrol-powered vehicles might see price cuts as competition heats up.

Thailand’s Role as a Regional EV Hub

As the second-largest economy in Southeast Asia, Thailand is a key player in the global auto industry, exporting nearly 60% of locally manufactured vehicles. The Board of Investment (BOI) has made adjustments to the incentive programme, including extended deadlines for battery production and new incentives for hybrid cars, to prevent an oversupply crisis.

BOI chief Narit Therdsteerasukdi stated that EV companies are set to begin exporting from Thailand this year, which could ease concerns over excess production. “We expect to see more EV exports in 2025, which should help balance the domestic market,” he said.

Read more on Thailand’s aviation, tourism industry thrives, reaping bountifully from Intra-Asia travels