On January 24th, 2023, the Ministry of Higher Education, Science, Research and Innovation (MHESI), led by Office of the National Higher Education Science Research and Innovation Policy Council (NXPO), Thailand Science, Research and Innovation (TSRI), Program Management Unit for Competitiveness (PMUC) and the National Science and Technology Development Agency (NSTDA) together with a group of modified electric vehicle manufacturers, such as Cho Thavee Public Company Limited, Panus Assembly Company Limited, ECU Shop 1 Company Limited, EV Car (Thailand) Company Limited, along with the Thai Electric Vehicle Association, Thai-Japanese Institute of Technology, EEC Modified Electric Vehicle Expert Center and Research and Development Center of the Alternative Energy Institute of Thailand, in conjunction with the taskforce to drive the modified electric vehicle policy and energy storage system and the subcommittee on National Strategy on Converted Electric Vehicles, Drones and Unmanned Aerial Vehicles, and the National Security Commission, Thai Border Affairs, National Strategy and National Reform, House of Representatives, all co-sponsoring the exhibition showcasing electric vehicles and converted electric vehicles, as well as organized the second round of seminar to invite public opinions on “Proposed guidelines to support the creation of converted electric vehicle industry (EV Conversion) to drive the policy of converted electric vehicles in Thailand”. The event was hosted in Seminar room B 1-2, B 1 floor, Parliament Building, with Mr. Chuan Leekpai, Speaker of the House of Representatives, giving the opening speech in the event. Mr. Manoon Sivapiromrat, chairman of the National Security Commission then presented a report and Mr.Thanakan Wongdeethai, secretary and member of the subcommittee presented the essential content of the draft proposal to support the creation of the converted electric vehicle industry. At the event, there were interested parties from the government sector, universities, colleges and vocational education institutions. More than 250 people participated from more than 145 agencies and the private sector. There was an exhibition showcasing important innovative components, and commercial converted electric vehicles developed by Thai people such as motorcycles, tuk-tuks, passenger cars, taxis, SUVs, pickup trucks, vans, classic cars, forklifts, and 10-wheel trucks, totaling more than 20 vehicles.
Mr. Manoon Sivapiromrat, chairman of the National Security Commission opened the exhibition showing electric vehicles and converted electric vehicles by pointing out that the government has seriously implemented the policy of electric vehicles and converted electric vehicles in the past 3 years, with the main objective of this seminar being to open up the floor for public opinions on problems or obstacles faced by converted electric vehicle operators, including related sectors that need the support from the government. Although Thai entrepreneurs are now much stronger than ever, there is still a need for support in enhancing their capabilities in many dimensions. And after various policies and measures have been implemented, this seminar is considered to be a brainstorming session to drive the converted electric vehicle industry to be able to expand to create jobs, generate income, both for the domestic market and for export in the future.
Mr. Chuan Leekpai, Speaker of the House of Representatives gave the opening remarks by congratulating and supporting the committee for organizing this seminar, because it is an important issue that will lead the creation of a guideline to support the movement of the country that takes into account the environment. This is in line with the parliament’s actions toward becoming a Green Parliament. Even though the topic of electric vehicles may be regarded as a new concept to most people, but the believe is that it would be very beneficial to have experts with the proper knowledge and expertise to convey the idea to everyone. After the opening remarks, Mr. Chuan Leekpai also visited to view electric vehicles and converted electric vehicles and discussed problems and obstacles with real entrepreneurs from both Bangkok and other provinces such as Pathum Thani, Nonthaburi, Nakhon Pathom, Samut Prakan, Chonburi, Rayong, Nakhon Ratchasima, Khon Kaen and Chiang Mai, etc., who have brought their work to exhibit at the parliament.
Mr. Thanakan Wongdeethai presented the problems, obstacles and challenges which the converted electric vehicle industry will help to solve, divided into 9 main issues, which are 1) the crisis of high fuel prices. If the existing cars are modified into electric vehicles, it will help save up to 5 times the cost of gas and 15 times the cost of car repairs per year 2) Household debt, 90% of GDP, including the grassroot demographic, who cannot bear the burden of buying new electric vehicles. 3) The national goal to reduce carbon dioxide emissions by 111 million tons within 8 years, of which 41 million tons is to come from the transportation sector, representing a total of 12 million electric vehicles. 4) The PM 2.5 smog problem in Bangkok, 80% of which comes from the transportation sector with 250,000 diesel pickup trucks in Bangkok, which cannot be solved with new cars. 5) Thailand has more than 2,000 Tier 3 enterprises that do not have the technology to produce electric vehicle parts, lacking transition tools, and risking business closure. 6) Thailand has 20,000 registered garages, and 50,000 unregistered, which cannot repair electric cars. A sudden transition would make them lose their business. But if some components are switched to electric vehicle components, the garage will be able to repair and learn as they go along. 7) 95% of personnel in the Thai automotive industry have mechanical skills, only 5% have electrical skills. Car manufacturers do not provide training to operators. 8) The demand for inexpensive spare parts in the after market of electric vehicles with a lifespan of 7 years or more is increasing. Thailand can make these parts. 9) Electric vehicles modified in the form of pickup trucks, if supported, the price will be reduced to 300,000 baht per vehicle. There are 7 million pickup trucks nationwide, 4 million of which are 10 years or older. If only 10% were converted, that makes 400,000 converted electric vehicles, which would translate to 120,000 million baht circulating among the parts manufacturers and domestic garages.
From the draft study results of converted electric vehicles prepared by the National Security Commissioner, the recommendations for supportive measures can be divided into 2 parts: financial measures and non-financial measures. And the aim is to support 3 distinct groups: the group making the modification, the user group, and infrastructure group. The details are as follows.
- Financial support measures for juristic persons that do business in conversion of petrol vehicles into electric (Converted Vehicles), including import tax exemption, and excise tax exemption for a period of 5 years; support for training expenses for converted electric vehicles, subsidy for investing in necessary equipment, support for the cost of batteries used in the production of converted electric vehicles, etc. As for the vehicle users and fleet operators supportive measures include subsidy for insurance costs and cost of expressways, etc. Then there are supportive measures for the infrastructure group providing transmission lines and electric charging, such as supporting the electricity necessary for charging stations, subsidy for installation of electric chargers in households, as well as financial aid to encourage private agencies to install charging stations in parking areas for service providers, etc.
- Non-Financial Support Measures (Non-Financial) for juristic persons that convert gasoline vehicles into electric (Converted Vehicles). For example, those who open a converted vehicle garage with a required certificate will receive a tax deduction, government-supported training, from which expenses can be tax deductible at 200%. As for vehicle users and fleet operators, (Vehicles Users and Fleet Operators), an example would be to requiring government agencies to convert their vehicles into electric vehicles, at least accounting for 50% of their total fleet, within 2 years; encouraing the government agencies to allow civil servants who use converted electric vehicles to charge their vehicles at their respective workplaces, etc. As for the transmission line infrastructure and electric charging systems, supportive measures could include adjusting the system and allowing converted electric vehicles to use electric charging stations in public areas.
The seminar participants gave various opinions and shared problems and obstacles, including recommendations for additional government support, which can be divided into 7 groups and ranked in order of importance as follows.
- Financial support such as tax reduction in the early stages, including excise taxes, customs taxes, battery assembly taxes and vehicle assembly taxes, would support the creation of new industries. At present, many groups of converted electric vehicles are more expensive than new electric vehicles imported from China, such as modified electric motorcycles, which are like small cars. When calculating these taxes, it will be similar to a whole vehicle imported from China due to FTA and measures to support the import. Maintenance costs of converted electric vehicles should be lower than those of new electric vehicles. There should be funding support for knowledge-building and reducing interest on EV conversion purchases, reducing registration fees, which are still considered expensive costs. Additionally, the government should consider reducing the electricity cost, which is currently expensive at 8 baht per unit. And in the long term, the import duty on parts should be maintained to develop domestic parts operators, but operators must also adjust quickly.
- Having a government agency as a host center will be able to consolidate demand and have sufficient volume to average down the costs of safety certification for garages. At present, there is no leasing option for converted electric vehicles, which would be desirable. Additionally something like a Sandbox and a central agency to support the cost of testing to be cheaper, resulting in better growth potential. A matching service, paring up entrepreneurs who can help each other along the value chain would allow collaboration and coordination of efforts, and the government can determine the groups to be responsible for various tasks, and support each group accordingly. Currently every entrepreneur has to do everything himself and the government can serve as the center of business matching with businesses from around the world.
- Quality, safety standards, integration of standard parts, especially the battery and the cable.
- Production of key parts. The key success factor is to be able to scale up and to allow investors to establish production process. It may be necessary have to undertake co-investment in technology and innovation jointly with entrepreneurs. Also, a national battery factory in Thailand that produced and sell to small entrepreneurs to develop applications would be very useful.
- Development and transfer of knowledge. Entrepreneurs currently do not have sufficient knowledge, and need upskilling and reskilling. The private sector should be open to accept new graduates of vocational and high-vocational studies, and be ready to help develop the curriculum to produce quality workforce.
- Research and development. The government sector can support the development of main components, of which there are no more than 10 items, and help to improve them in terms of quality and prices that Thai entrepreneurs can afford. They can then be produced for exporting as well.
- Gaining confidence and acceptance. Although there are Thai innovators who design and produce parts by themselves and can use them well, such as electrical board, but because EV vehicles and EV Conversion are considered new concepts, and many people are still not confident in the products developed and manufactured in Thailand. The government could act as the first user and drive the converted electric vehicle industry to become nationally recognized, and further promoted to be able to export to foreign markets.