On Monday, an official from the prime minister’s office revealed that Tesla, the electric vehicle (EV) manufacturer, has undertaken a site survey for a production facility dedicated to EVs and batteries in Thailand. Additionally, the official noted that the Thai government has extended an offer to provide Tesla with 100% green energy to power the proposed facility.

The survey underscores Thailand’s commitment to become an EV manufacturing hub in Asia. It also indicates the government’s desire to leverage its infrastructure and labor force to build a competitive supply chain for EVs.

While challenges can impede realizing Thailand’s potential as an EV hub, several factors can provide opportunities. The country has a sizeable automotive industry with an annual production capacity of 2.5 million vehicles, and the government is determined to convert a third to EVs by 2030. It is already one of the most active markets for EVs in Southeast Asia, with both domestic and foreign OEMs investing in production.

• Trending Now: 820,000 GM Trucks Recalled to Address Faulty Tailgates

EV adoption remains low in Thailand mainly due to limited awareness and a need for operational incentives such as dedicated parking lanes. To raise awareness and drive demand, a holistic approach is needed. This includes running EV conferences, raising customer education, and implementing marketing initiatives. The government can also offer financial incentives such as tax benefits, removal of ISO certification requirements, and soft loans to EV charging operators. Furthermore, a business model that focuses on higher utilization and a short payback period should be considered to improve profitability.

Achieving long-distance EV travel requires a dense, high-quality public charging network. This can be achieved by prioritizing DC charging, which can refill a typical 40 kWh battery to 80% in less than an hour. To further enhance EV availability, the government can work closely with local authorities to identify high-density locations through data analysis and set targets for EV charging stations in key cities.

An effective EV charging strategy must be built upon a strong foundation that includes developing an efficient local supply chain and promoting an ecosystem that enables EVs to thrive in the country. The government should focus on creating an EV-friendly policy framework that aims to reduce entry barriers for new players in the industry, such as providing exemptions from emissions and fuel taxes and lowering or eliminating customs duty. The government should also encourage B2B/B2C2C EV usage and promote more sustainable mobility options by providing tax rebates, exemptions, and free parking for all EVs. It should consider reskilling mechanics to help it adapt to EV maintenance and repair so that the country can maintain its current after-sales support and service level. This would reduce the risk of job losses in the traditional automotive service and maintenance sector and create a new generation of EV enthusiasts. To support these efforts, the government must also consider setting a goal for the number of EVs available in each market segment by 2030.