After senior executives of Toyota Motor Thailand Co., Ltd. expressed concerns on their personal Facebook about the Thai automotive industry potentially losing its competitiveness in the region's largest vehicle manufacturing and assembly industry.
This is due to the Thai government's support focusing solely on electric vehicles (EVs) imported from China, without considering Thailand's foundational automotive sector, especially the internal combustion engine industry, which involves major investments by Japanese automakers.
Meanwhile, the Indonesian government has openly welcomed Toyota to invest fully if it chooses to relocate production from Thailand to Indonesia, showing no belief that Thailand must monopolize being the regional automotive production hub.
The Thai government seems to have immediately started reviewing its policies supporting the import of EVs from China and other countries.
However, the Office of the National Economic and Social Development Council (NESDC) commented that relocating Toyota's production base out of Thailand is not as simple as it is often said to be.
Not long ago, Mr. Supakorn Rattanaworaha, Senior Vice President of Toyota Motor Thailand, questioned the Thai government's promotion of EVs, noting it remains focused on sales volume while key parts, especially batteries, must still be imported, which does not equate to relocating EV production from China into Thailand.
This may not generate as much economic value for Thailand as expected, especially when compared to the ongoing loss of the internal combustion engine parts supply chain due to the gradual relocation of Japanese automakers' production bases.
He also remarked that Thailand has built its automotive industry for over 60 years, developing parts, workers, factories, logistics, engineering, and export markets, forming a successful Automotive Ecosystem, which cannot be created overnight or in just a couple of years.
Crucially, whether today's advantages will remain so for the next 10-20 years depends on how smoothly and skillfully the Thai government manages this critical transition.
The Chinese EV market has grown rapidly, but as it expanded, growth has slowed due to fierce competition, causing more than half of the manufacturers to exit the market compared to the European EV market.
Although the market is growing strongly, Europe enforces strict environmental policies and regulations, whereas the United States takes a different approach, with EVs increasing about 10% but public interest mainly focused on hybrid vehicles.
"What we learn globally is that no single technology fits every country; each market seeks a balanced mix suitable for itself, which is essentially the Multi-Pathway concept Toyota has long advocated..."
Returning to Thailand, I think we need to clearly ask ourselves whether we are promoting EV sales or building an EV automotive industry, as these two are fundamentally different.
...Today, EV sales in Thailand have increased because of low prices and cheap energy, which certainly benefits consumers as many have noted."
But if these vehicles are produced abroad or have their batteries and key components imported, and Thailand only assembles, screws bolts, applies glue, and connects wires... what does Thailand truly gain from this automotive industry transition?
The automotive industry is not just about a single vehicle; it is an entire ecosystem. Today, is this ecosystem growing alongside EV sales?!
Certainly, the answer should not be just incentives funded by high ICE taxes confusingly used to support EVs, resulting in losing Suzuki but gaining Neta instead.
What must be done is selecting and promoting sincere investors who will build the ecosystem, foster competitive confidence through technology transfer, infrastructure development, workforce training, and comprehensive supply chains.
Most importantly, it is about ensuring that national policies have clear and continuous directions because investors fear uncertainty more than change.
Supakorn emphasized his confidence in the Thai people's capabilities, unmatched globally, and his desire to see Thailand produce future cars, develop future technologies, create jobs, and export worldwide to drive the Thai economy together.
"I remain confident that if we do this, regardless of whether the future involves BEV, HEV, PHEV, Bio-Fuel, Fuel-Cell, Hydrogen, or any technology, Thailand can sustainably remain the automotive hub of the region."
Data shows the EV market began to play a role in Thailand since 2019 with the launch of the MG ZS EV, priced affordably and more accessible than internal combustion engine vehicles, attracting other EV manufacturers gradually.
Combined with government tax incentives to reduce oil energy use, which coincided with the energy price crisis caused by the Middle East war.
EV manufacturers thus achieved explosive sales, rapidly increasing to 120,000 units in 2025, and in the first half of 2026, EV sales grew by 30%, potentially exceeding 200,000 units for the year, with over 50% being imports.
Meanwhile, the overall internal combustion engine vehicle market—including those running on oil, gas, and biodiesel—has continuously declined since EVs entered the Thai market.
This has prompted the automotive industry to urge the government to review the 2% import tax rate on EVs and to consider the fact that EV production costs in China are 30-40% lower than in Thailand.
This allows Chinese EV manufacturers to price their vehicles below those produced in Thailand.
The Ministry of Finance seems to have promised to review EV and hybrid vehicle taxes as well as those on vehicles using other fuels, but no completion date has been confirmed.
For those who think relocating Toyota's production base abroad is not easy, consider the previous belief that Vietnam could never catch up with Thailand—and yet here we are.
It's time to rethink and innovate.