Explore how bullish EV incentives and a wave of Chinese investment forced Japanese carmakers to abandon Thailand’s once‑proud ‘Detroit of Asia’. Learn more now.
Thailand has long billed itself as the “Detroit of Asia,” thanks to a robust supply chain and a steady stream of foreign investment. Between 2022 and 2025, however, the country witnessed a rapid exodus of Japanese automakers – a development that many observers saw coming, yet few anticipated the speed at which it unfolded.
The ambitious 30@30 roadmap
In 2021 the Thai government launched the 30@30 plan, pledging that 30% of all vehicle production by 2030 would be fully electric – from motorcycles to trucks and buses. To back this vision, the state created the EV Association (EVAT) and the National Energy Policy Committee (TOU) to build charging infrastructure and keep electricity prices low.
At the time, a flat charging fee of 2.6 THB (≈ 0.8 USD) per kWh was offered regardless of peak or off‑peak hours, a rare incentive that made electric vehicles (EVs) financially attractive for both manufacturers and consumers.
Deep pockets: Tax breaks and subsidies
Alongside cheap charging, the government rolled out a suite of fiscal incentives:
- Tax holidays for firms that commit to local EV production, backed by an estimated budget of 3 billion Baht.
- Consumer rebates ranging from 70,000 Baht (≈ 2,000 USD) to 150,000 Baht (≈ 5,000 USD) depending on the vehicle’s specifications.
- Up to 24 billion Baht in subsidies for EV battery manufacturers.
- Import‑tax exemptions for nine categories of EV parts and components, many sourced from China.
The impact was immediate: registrations surged to 76,000 electric vehicles in 2023 – a 600% jump from previous years.
Chinese manufacturers rush in
These generous policies turned Thailand into a magnet for Chinese automakers. Between 2023 and 2024, nearly ten Chinese firms announced new factories. Highlights include:
- SAIC – a plant capable of producing 200,000 vehicles per year.
- Great Wall Motors (GWM) – the first Southeast Asian EV factory from the group, backed by a $1.44 billion investment.
- Special credit lines, such as a 10 billion Baht loan approved for the NETA brand in 2025, despite its limited domestic track record.
By lowering production costs and offering targeted subsidies, Thailand effectively created a cost‑advantage gap that Chinese EV makers could exploit.
The domino effect on Japanese brands
Japanese firms, long dependent on Thailand’s traditional internal‑combustion engine (ICE) ecosystem, found themselves squeezed on two fronts:
- Rising competition from subsidized Chinese EVs made it harder to justify continued ICE production.
- Reduced profit margins as the Thai market shifted sharply toward electric mobility.
Facing dwindling returns, several Japanese manufacturers chose to shutter factories or scale back operations, citing “unfavourable market conditions.” For many, the decision was the proverbial last drop that broke the glass.
What lies ahead?
If the current trajectory holds, Thailand could emerge as a vibrant EV hub by 2027, but at the cost of a once‑thriving ICE industry that contributed roughly 11% of national GDP. The country’s economic landscape may become heavily weighted toward electric mobility, with new jobs, supply chains, and export opportunities – yet the transition also raises questions about workforce retraining and the long‑term resilience of the automotive sector.
In short, Thailand’s bold EV push has reshaped the competitive map, rewarding early adopters while pushing traditional players to the sidelines.