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China’s Great Wall Motor has signed a Memorandum of Understanding with the government of Thailand, gaining approval for its “EV 3.5” subsidy scheme, aimed at incentivizing the production and purchasing of electric vehicles (EVs) within Thailand, the company announced on Saturday January 20.Other Chinese automakers benefiting from the subsidy include Changan Automobile and SAIC Motor.
The move will further strengthen Chinese automakers’ leading position in Thailand’s EV market and help Thailand attract foreign investments, an industry analyst said.
Initially rolled out last November, the “EV 3.5” pact offers a subsidy of up to 100,000 baht ($2,811) per car purchase from 2024 to 2027.
The pact also requires that, from 2026 onward, foreign automakers that benefit from the subsidy must manufacture two automobiles within Thailand for each one they export to the country, according to its official statement.
Alongside Great Wall Motor and SAIC Motor, which have gained a strong foothold in Thailand’s EV market, Chinese automaker Build Your Dreams (BYD) has announced plans to build a factory in the city of Rayong, Thailand, with a production capacity of 150,000 EVs per year starting 2024.
With a total investment of 4.05 billion yuan ($568.39 million), Changan Automobile’s manufacturing base in Thailand is also scheduled to start production in 2025.
Since the EU’s anti-subsidy investigation into Chinese-made EVs spurred growing uncertainty in Europe, Southeast Asian markets such as Thailand have gained more attention from Chinese EV manufacturers seeking alternatives.
Data from the China Association of Automobile Manufacturers (CAAM) show that China’s auto exports reached 4.91 million units in 2023, a year-on-year jump of nearly 58%. Among these, new energy vehicle exports accounted for nearly 25%, with Europe and Southeast Asia being the main destinations.
According to data from the automotive news outlet Autolifethailand, the sales of pure EVs in Thailand grew steadily from 190,000 to 970,000 units from 2021 to 2023. Among the top selling EV models in 2023, China’s BYD came in second following Tesla, with sales accounting for around 40% of the Thai market.
China’s lithium carbonate prices rose in the week to January 18, supported by consumer restocking ahead of the Lunar New Year holiday and an open arbitrage window between the spot and futures markets.
Lithium hydroxide prices in China, however, fell further due to ongoing weak market fundamentals.
Fastmarkets’ weekly price assessment for lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 95,000-100,000 yuan ($13,333-14,034) per tonne on Thursday, up by 1,000-2,000 yuan per tonne from 94,000-98,000 yuan per tonne a week earlier.
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