Mercedes joins Thai electric vehicle program

German luxury car maker Mercedes Benz said last week it will apply for Thai government incentives to produce fully electric vehicles in the Kingdom with the first models rolling off production lines this year, as Mazda said it will invest in producing hybrid electric cars in the Kingdom, and Toyota said its first hybrids assembled at its Thai factory will hit the market this year.

“Mercedes-Benz is talking with government agencies and expects to finalize its plan very soon,” said Michael Grewe, president and chief executive of Mercedes-Benz Thailand.

Manufacturing electric vehicles (EV) and promoting advanced automotive technologies are among the10-targeted industries under Thailand 4.0, the 20-year national strategy to advance the Thai economy through green and higher technologies, research and development, innovation and creativity. As such, the Board of Investment (BoI) has created a package of generous incentives for those who invest in those industries.

“The government’s EV policy is the best automotive roadmap in Southeast Asia and it is also in a line with Stuttgart-based Daimler’s strategy for its electrified vehicles’ footprint,” said Grewe.

The German automaker has applied to the Board of Investment for privileges and incentives to produce plug-in hybrid vehicles (PHEVs) and battery electric vehicles (BEVs) in the Kingdom. The company has already been manufacturing hybrid electric vehicles (HEVs) in Thailand since 2013. Mercedes partners with Thonburi Automotive Assembly Plant Company to produce the cars, and its plant in Samut Prakan had been turning out 40,000 HEVs per year before phasing out the program.

Since early 2016, Mercedes has been piloting PHEVs assembled in Thailand and is now committing to producing them in the Kingdom for the long term. The incentives expected from the BoI would make it cost effective to manufacturing the batteries and other components for EVs in Thailand, as opposed to importing them from Mercedes’ plants in Europe.

Although the market for EVs of all types in Thailand is still very small, sales of Mercedes’ vehicles of all types in the Kingdom were up 23 percent in 2017 to 14,484 cars, Grewe said.

Japanese automakers were also plugging into EV production in Thailand. Mazda announced last week that it will invest $356 million in its Rayong plant so that it can start making HEVs. “Mazda will discuss a timeline with the BoI this month, starting from investment to production and development for local parts to support the future of hybrid cars,’’ said Chanchai Trakarnudomsuk, president of Mazda Sales Thailand.

And Toyota, having already received BoI privileges to produce EVs, said it will unveil its EV sport utility vehicle in Thailand in March when the first models roll out of its plant in Chachoengsao province in the Eastern Economic Corridor. The company said it already has 3,000 domestic pre-orders for the HEV version of its C-HR sport utility vehicle.

Toyota was the first company to apply to the BoI for EV production privileges.