Thailand is well positioned to become Southeast Asia’s leading market for electric vehicle (EV) manufacturing and innovation which will have implications for the country’s commercial real estate industry.
According to global commercial real estate and investment management company JLL, the potential for sustained growth in Thailand’s EV industry, backed by government policies and foreign investment, will create at addressable real estate market of least $6.5 billion by 2030, to support the country’s emergence as a regional manufacturing and innovation leader in the space.
JLL’s forecast for the size of the real estate market required to support Thailand’s EV industry is based on several key developments in this space, the company said in a statement on Friday.
The implementation of the Government of Thailand’s ambitious 30@30 policy, which aims for 30 percent of all vehicles made in Thailand to be electric by 2030, will frame the real estate requirements of the sector from now onward.
The 30@30 policy initiative includes substantial subsidies, tax cuts, and the EV 3.5 incentive package covering 2024-27.
“Thailand has made a clear statement through the implementation of the 30@30 policy and EV 3.5 package – we have the ambition and the drive to become the leading EV manufacturing hub in the region. The incentives are incredibly appealing to investors, manufacturers and suppliers operating in the EV industry, but for the potential of this industry to be fully realized at a national level, the role of commercial real estate to form the backbone of the longer-term sustainability of the market cannot be understated,” said Michael Glancy, Managing Director, Thailand and Indonesia, Jones Lang Lasalle (JLL)
As of 2024, Thailand’s strategic efforts have attracted diverse onshore and offshore capital into the EV space, with a cumulative investment volume of approximately $1.8 billion already committed. Notable deployments into the industry include a $1.4 billion by China-based EV manufacturers, including BYD Company Limited (BYD), and a $4.4 billion investment by Japan-based automakers.
Additionally, for Thailand to meet its 30@30 goal to have electric vehicles constitute 30% of total car manufacturing by 2030, it will require domestic production of more than 34 GWh of batteries, requiring new manufacturing and industrial space to be sourced. At the end of 2023, the number of EVs totaled at 167,000. This accounts for 26.4 percent of the 2030 goal of 440,000 EVs.
Glancy emphasized, “Research and development are critical for maintaining Thailand’s competitive advantage in the EV industry, which requires specialized real estate capable of supporting high-tech manufacturing, mass production and connections to supply chains.”
Several notable activities and developments underline Thailand’s burgeoning EV landscape. To sustain and boost this momentum, including a focus on research and development (R&D) by offering subsidies and tax breaks for carmakers establishing R&D centers.
Major automakers like Hyundai and China’s CATARC have already set up R&D facilities in the country. Additionally, BYD has opened a new parts warehouse in Bangkok, and Tesla has established a comprehensive facility comprising a service center and parts warehouse.
JLL also foresees significant growth in all sectors connected to the wider EV ecosystem, such as software and AI integration, battery technology, tires, and rubber.
“The influx of foreign investments showcases Thailand’s competitive edge in the rapidly growing EV sector. The combination of government incentives, a skilled workforce, and existing infrastructure makes Thailand an attractive destination for both new and experienced EV manufacturers. However, investment in manufacturing, R&D, and other real estate within the wider ecosystem will be the most critical aspect in turning the ambitions of Thailand’s EV goals into a sustainable reality that will differentiate its industrial economy for decades,” Glancy added.
New York Stock Exchange-listed JLL is a global commercial real estate and investment management company. It helps clients buy, build, occupy, manage, and invest in a variety of commercial, industrial, hotel, residential and retail properties.
A Fortune 500 company with annual revenue of $20.8 billion and operations in over 80 countries around the world, the company has more than 110,000 employees.
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