By Chayut Setboonsarng
RAYONG, Thailand (Reuters) – China’s BYD (SZ:) opened an electric vehicle factory in Thailand on Thursday, the carmaker’s first in Southeast Asia, a fast-growing regional EV market where it has become the dominant player.
“Thailand has a clear EV vision and is entering a new era of automotive production,” said BYD CEO and President Wang Chuanfu at the opening ceremony. “We will bring technology from China to Thailand.”
The BYD factory is part of a wave of investment worth more than $1.44 billion from Chinese EV makers setting up factories in Thailand, aided by government subsidies and tax breaks.
Hong Kong-listed shares of BYD, the world’s largest EV maker, rose 1.6% to HK$235 after hitting their highest level in a week.
Thailand is a regional car assembly and export center and has long been dominated by Japanese car manufacturers Toyota Motor (NYSE:), Honda Motor Co (NYSE:) and Isuzu Motors.
According to a government plan, the country aims to convert 30% of its annual production of 2.5 million vehicles to electric vehicles by 2030.
“BYD uses Thailand as a manufacturing center for exports to ASEAN and many other countries,” said Narit Therdsteerasukdi, secretary general of the Thai Board of Investment, referring to the 10-nation Southeast Asian bloc.
As part of its expansion outside China, BYD is building its first European manufacturing base in Hungary.
The BYD plant will start operating in three years and will produce electric cars and plug-in hybrids for the European market, where the European Commission imposes tariffs of up to almost 38% on Chinese-made electric cars.
BYD’s Chinese-made electric cars will attract tariffs of around 17%.
The sprawling $490 million Thai plant, announced two years ago, will have a production capacity of 150,000 vehicles per year, including plug-in hybrids.
The right-hand drive electric vehicles produced at the plant will potentially allow BYD to avoid EU tariffs, which apply to vehicles made in China.
“We will also assemble batteries and other key components here,” said Liu Xueliang, BYD general manager Asia Pacific.
Thailand is the largest overseas market for BYD, which held a 46% share of the country’s EV segment in the first quarter and is the third-largest player in passenger cars, according to research firm Counterpoint.
Other EV rivals in the local market include Great Wall Motor, which also has a production facility in Thailand, and US automaker Tesla (NASDAQ:).
