EV shift puts focus on local supply chain development
aiu.thaiauto.or.th, 2 Oct '26
The Thai automotive industry is undergoing significant change due to the growth of electric vehicles (EVs), affecting production structures, technology and supply chains.
Producers that invest in and use local content are more likely to benefit from the transition, while manufacturers that rely mainly on imports will face different conditions and costs.
The policy comes amid a slowdown in the Thai automotive market. Purchasing power and auto loans are under pressure, alongside fierce price competition and the entry of EV manufacturers from China. These factors have affected production capacity utilisation and businesses throughout the supply chain.
The shift from internal combustion engine (ICE) vehicles to EVs has forced Thailand's existing strengths in engines, transmissions and ICE components to adapt. Electric motors, power electronics, semiconductors, software and electronic components are becoming increasingly important.
Attracting EV assembly plants alone may not be sufficient. Thailand needs to create a new supply chain connecting Thai parts manufacturers, technology, research and development (R&D), and human resource development.
Therefore, the adjustment of EV measures has an important goal of balancing the attraction of new investment with the maintenance of the existing industrial base. Manufacturers from China, Japan and other countries have the opportunity to play a role in the Thai automotive ecosystem.
At the same time, Thai component manufacturers must accelerate their transition from ICE components to EV parts to maintain competitiveness. An increase in investment and the use of domestic parts could support this transition. However, the business impact also depends on the details of the tariffs.
Therefore, Thailand's main challenge is not only to increase the number of EVs sold, but also to bring jobs, technology, investment and added value from EV production into the Thai economy. This would support the transition from being an ''EV market'' to becoming a vehicle production base for the future in the region.
