TIR_Newsletter_Feb2021_AllPages_02_New

Vol. 31 l February 2021 SPEEDING UP EVs Imagine ASEAN’s Fully-Charged EV Hub

BOI NET APPLICATION Total Foreign Investment January – December 2020 907 Projects US$ 7,371.24 Million Total Investment 1,717 Projects US$ 15,342.76 Million FOREIGN INVESTMENT BY TARGET SECTORS First S-Curve New S-Curve Electronics Biotechnology 127 Projects l 1,356.41 M 6 Projects l 683.26 M Agriculture Digital & Food Processing 105 Projects l 29.59 M 53 Projects l 389.03 M Automotive Aerospace 87 Projects l 1,055.68 M 3 Projects l 7.94 M Petrochemicals Medical & Chemicals 32 Project l 159.31 M 61 Projects l 1,081.60 M Automation Tourism & Robotics 5 Projects l 151.34 M 8 Projects l 18.34 M FOREIGN INVESTMENT BY MAJOR ECONOMIES 57N92e5tPh.9reo2rjelMacG29nt81sed.rP5sm3roaMjencyts Republi2c6o8Pf5rKo.3oje3rceMtas J22a1,4p12aP1n.r7o5jecMts 7U389n3iPtMerodjeScttastes S1w91it4Pz5ero.r6jlea6cnMtds 116,400P3rCo.3jhe5icnMtas 75H62o2nP.g1ro6KjeMocntsg S1521in11g.P8a4rpoT35oMja76eri1cePw.t6srao5njeMcts THAILAND I3nd8Po1ron.0jee5scMitas Unit: US$ (US$ = 31.36 as of 31 March 2021) Note: Investment projects with foreign equity participation from more than one country are reported in the figures for both countries. Statistics on net applications are adjusted whenever applications are returned to applicants due to insufficient information. For more details, please visit www.boi.go.th

04 09 Cover Story Industry Focus ASEAN’s Fully Charged EV Hub Confidence in EVs Fuels Thai Market 12 13 Highlights Executive Talk Making a Foray into Next-Generation Transportation Driving Thailand’s Economic Transformation 16 19 Company Interview Thai Economy At-A-Glance Energy Absolute Plc

COVER STORY ASEAN’S FULLY CHARGED EV HUB Imagine busy urban streets alive with battery-powered motorcycles, cars and buses but without the haze of exhaust fumes and the noise of whirring engines. Imagine e-ferries docking quietly at piers and traveling along waterways without emitting hot black smoke into the air or oil into the water. Imagine cities that are more livable with healthier air and cleaner water. Imagine ASEAN’s fully-charged EV hub. Thailand is committed to playing a leading a better economy of scale, making them laid out a framework of EV development role in the global electric transportation an even more appealing alternative to over a 5-, 10- and 15-year timeframe revolution and fulfilling its international cars with traditional combustion engines. with the aim of transforming the country’s commitment to greenhouse gas reduction. Catering to the vibrant consumer market, well-established automotive supply chain Indeed, the use of Electric Vehicles (EVs) this trend also reflects the concrete for the production of battery-powered has quickly become a practicality in national framework of promoting the usage vehicles and building the technological Thailand where multiple models of EVs of and confidence in EVs, expanding capacity for modern mobility. from global and local manufacturers have the network of charging facilities, and The main objective of the plan is generated great enthusiasm among local developing EV supporting industries. to establish Thailand as “ASEAN’s center carusers,attractedbytheirenvironment- With EVs considered to be an of excellence” in three areas, namely friendly advantages, reasonable prices and important first step towards realizing the zero-emission vehicles, next-generation increased confidence in its long-term uses. next-generation transportation goals as automotive technology, and innovation While Hybrid Electric Vehicles they seek to leverage on digital technology in the next-generation business models (HEVs) have already become popular to improve functionality, the Thai government by 2035. Individual goals within the plan with Thailand’s car users, the country is making efforts to attract significant relate to EV usage, electricity charging is forecast to see an increase in the investment in the EV industry. facilities, industry capacity building, number of more intensive battery-fuel incentives for EV adoption, and awareness vehicle types of Plug-in Hybrid Vehicles Driving the EV of next-generation transportation. Leveraging (PHEVs) and Battery Electric Vehicles Ecosystem Forward on the competitiveness of its skilled (BEVs) on the road over the next few workforce and ecosystem in the years. As more of these EVs are being The National Electronic Vehicles Policy automotive sector at the global level, the sold, their prices are also falling due to Committee, set up by the Thai government, Thai government envisions the country has recently introduced a masterplan which 1 POLICY-PAPER-EV-2035_30092020.pdf (nxpo.or.th) 04 Thailand Investment Review

e-motorcycles, electric three-wheelers, target of all newly procured cars by the COVER STORY and electric boats to the introduction of public sector being BEVs by 2025 with becoming the largest investment hub EV battery plants, charging stations, and 15% of cars sold in the private sector also for EVs in one of the world’s fastest- home-based charging system services expected to be BEVs by the same year. growing economic blocs, the Association as part of the ongoing conversion from Supporting the convenience of local EV of Southeast Asian Nations (ASEAN)1. combustion engines to EVs. usage will be 10,000 charging stations In Thailand’s large automotive supply across the country at no more than a chain, where more than 2,000 companies Joining Global 50-kilometer radius from one another operate, 30 global automakers are using 30@30 Campaign by 2025, with the number expected to the country as their main production increase to 80,000 charging stations by base in ASEAN. Thanks to four decades In line with the “30@30” global collaboration2 2035. Driven by state-enterprises and of developing the technical knowhow, in which countries target achieving certain the private sector, Thailand currently labor force, parts production and supporting greenhouse-gas reductions, the Thai has a total of 650 EV charging stations facilities for the automotive industry, government has set the goal of having with around 2,000 chargers out of which Thailand has established itself as the EVs, mostly PHEVs and BEVs, account 700 are quick charging facilities. world’s 11th largest automobile production for one-third of all cars sold in Thailand, The country’s EV development plan base, with a total output of 2.2 million or around 750,000 units, by 2030. The calls for the Thailand Board of Investment units in 2020. projection will see the total number of (BOI) to expand the scope of investment The progress being made in EV EVs on the road reach 1.2 million by the promotion incentives for multinational technology also creates tremendous end of the current decade. Considering and local companies to support industrial new opportunities for local companies that Thailand had a total of around capacity building in a wide range of to enter the EV market, as it requires 200,000 EVs on the road at end of last areas, namely technology, design and assembly methods that differ from year, the government is committed to production, market service, innovations, those used in the production of fossil accelerating investment in and the use and adaptability. As for the policy to fuel-driven combustion engines. In line of EVs locally over the next five years to promote technology and innovation with the global EV evolution, Thailand’s strengthen the local EV ecosystem. development, the target is oriented flourishing EV market sees international In working towards these targets, towards high-technology components and local entrepreneurs undertaking Thailand is expected to see a complete such as batteries, drive trains and business ventures in a variety of areas conversion towards EVs among the public controller systems, as well as EV ranging from the manufacture of sector and public bus services over the prototypes. passenger and commercial EVs, e-buses, next decade. By 2035, the plan then A competitive digital and energy envisions EVs being the mainstream infrastructure will also cement Thailand’s means of transport in the private sector, position as the hub of next-generation particularly BEVs and PHEVs for long transportation with a focus on Connected, distance travel, higher-powered two-wheel Autonomous, Shared and Electricity EVs for urban use, and three- and four- (CASE) technology in ASEAN, where wheel EVs for the transportation of goods. technology such as IoT, cloud and AI Under the Thai government’s plan to played a key role in driving functionality. gradually phase out internal combustion Thanks to the continued investment in engine vehicles, the public sector will the country’s broadband internet facilities lead the local adoption of BEVs with a 2 http://www.cleanenergyministerial.org/campaign-clean-energy-ministerial/ev3030-campaign 3 https://www.bangkokpost.com/business/2054991/thailand-tops-internet-speed-testing 0 5Thailand Investment Review

COVER STORY and efficient telecommunications system, the manufacture of four-wheel PHEVs Thailand recorded the world’s fastest and HEVs in addition to BEVs, while internet speed based on the Speedtest further incentives are available if certain Global Index in December 20203. requirements are met. The country’s current power 3-year CIT exemption for the generation capacity reserve of nearly manufacture of electric two-wheelers, 50% of total capacity, higher than the three-wheelers, buses and trucks. global average of 15-20%, reflects the 5 to 8-year CIT exemption for country’s readiness for the development battery packaging and the manufacture of EVs. Meanwhile Thailand is committed of battery modules and cells, and a 90% to developing a “Smart Grid” system reduction of import duties for two years which will produce and distribute power on essential materials used in battery in a more efficient way and support the production. development of EVs in the country. 8-year CIT exemption for 17 key components of EVs, 4 out of which are BOI Incentives Reinforce new categories. Thailand’s EV Vision 8-year CIT exemption for the manufacture of electric boats. The Thailand Board of Investment (BOI) During 2017-2019, the BOI granted has recently introduced comprehensive investment incentives to 28 EV investment promotion incentives to replace manufacturing projects, including 5 the expired package for the EV industry, HEVs, 7 PHEVs, 14 BEVs and 2 E-Bus with a main focus on accelerating the projects, with a total investment value development of the BEV ecosystem and of US$ 2,700 million and an annual building Thailand up as a manufacturing manufacturing capacity of 570,000 units. hub for BEVs, including lithium-ion batteries. In terms of EV parts and batteries, the BOI granted investment incentives to In more detail, the promotional package 14 parts and 10 battery manufacturing offers the following incentives: projects with a total investment value of 8-year CIT exemption for the US$ 350 million. manufacture of four-wheel BEVs, plus an additional 3-year CIT exemption for 06 Thailand Investment Review

BOI Revamps 4 Manufacture of Battery COVER STORY Electronic Vehicle Electric Buses and Trucks Incentives 1 Manufacture of Battery Electric Four-Wheelers (Investment in BEVs is required.) Investment of Investment of e3x-eyCmeIpTtaiorn 5 billion Bht or above up to 5 billion Bht * maximum total of 11-year tax exemption available if all requirements are met. B EV s 8CI-Tyeexeamrption BEV s 3CI-Tyeexeamrption P HE Vs 3CI-Tyeexeamrption PHE Vs 3CI-Tyeexeamrption HEVs no tax incentives HEVs no tax incentives * maximum total of 11-year tax exemption * maximum total of 11-year tax exemption available in the case of R&D available if all requirements are met. 2 Manufacture of Battery 5 Manufacture of Battery Electric Motorcycles Electric Boats e3x-eyCmeIpTtaiorn e8x-eyCmeIpTtaiorn * maximum total of 11-year tax exemption * maximum total of 11-year tax exemption available if all requirements are met. available if all requirements are met. 3 Manufacture of Battery 6 Manufacture of EV Parts e8x-eyCmeIpTtaiorn Electric Three-Wheelers and Batteries 4 tNoeawtoEtValP17arts e3x-eyCmeIpTtaiorn 90% reduction of material * maximum total of 11-year tax exemption import duties for 2 years available if all requirements are met. and 3 to 8 years of CIT Source: Thailand Board of Investment exemption for the manufacture of battery cells and modules 0 7Thailand Investment Review

COVER STORY Thailand’s Transformation Towards Zero-Emission Mobility 2025 All vehicles procured for government agencies and public fleets to be zero-emission vehicles (ZEVs) 15% of all new vehicles produced to be ZEVs 2030 All vehicles used by government agencies and public fleets to be ZEVs 30% of all new vehicles produced to be ZEVs 2035 All new vehicles produced to be ZEVs 08 Thailand Investment Review SHoiguhrecreE: “dWuchaitteioPn,aSpecriefnocreT,hRaeilasnedar’schEaVnDdeInvneolovpamtioennta”nbdyotthheerMaigneisntrcyieosf

CONFIDENCE IN INDUSTRY FOCUS EVs FUELS THAI MARKET Just as growing environmental awareness and advancing EV technology have driven a surprising increase in global EV sales, these same factors have also significantly increased Thai car users’ enthusiasm for switching to EVs. Their growing confidence in the long-term advantages of EVs combined with their environmental consciousness have seen EV sales in Thailand continuing to grow in 2020, on the back of flourishing investment by both Thai and local investors. With a solid development path for the local EV industry, Thailand’s EV market is firmly set on an accelerated growth trajectory over the next few years. According to the Electric Vehicle Association HEV & PHEV (Units) 200,00 Accumulated Number of xEV Registration / 6,000 BEV (Units) of Thailand (EVAT), the use of all forms 180,000 Between 2016 - 2020 5,000 of EVs-including motorcycles, 3-wheelers, 160,000 4,000 passenger cars, buses and trucks-rose 140,000 HEV/PHEV BEV 3,000 by 70% from the previous two years, 120,000 2,000 bringing the total number of EVs1 on 100,000 1,000 Thailand’s roads to 192,000 units at the 80,000 0 end of 2020. Of the 35,300 new EVs 60,000 registered in 2020, the overwhelming 40,000 majority of 32,300 units were PHEVs 20,000 and HEVs. While just 3,000 units were BEVs. In terms of usage purposes, 0 passenger cars accounted for the majority of the newly registered EVs, Accumulated Number of xEV Registration in 2020 / followed by motorcycles. It is also worth As of 31 December 2020 noting that the 3,000 new BEVs on Thailand’s roads in 2020 was double the number for 20192. HEV/PHEV 11 BEV 186,272 5,686 7,236 235 120 2,202 179,034 3,128 Car (179,034) Car (2,202) Motorcycle (7,236) Motorcycle (3,128) Tuk Tuk (0) Tuk Tuk (235) Bus (1) Bus (120) Truck (1) Truck (0) Source: Department of Land Transport 1 https://www.ev-volumes.com 2 http://www.evat.or.th/attachments/view/?attach_id=247920 0 9Thailand Investment Review

INDUSTRY FOCUS The Thai government’s National Electric Vehicle Policy Committee targets HEV & PHEV (Units) 35,000 New Number of xEV Registration / 3,500 BEV (Units) having EVs account for 30% of all car 30,000 Between 2016 - 2020 3,000 sales in Thailand by 2030, which equates 25,000 2,500 to 750,000 out of 2.5 million cars 20,000 HEV/PHEV BEV 2,000 manufactured. Taking steps towards 15,000 Number of xEV Registration in 2020 / 1,500 reaching that goal, the Committee expects 10,000 1,000 between 60,000 and 110,000 new EVs 5,000 1 January - 31 December 2020 500 to be added to the road over the next 0 couple of years, and 250,000 Eco EVs 0 1 BEV 2 and 3,000 smart city buses to be in the 2,999 market over the next five years. HEV/PHEV The Committee’s target will see 32,264 Thailand having a total of 1.2 million EVs on the road by 2030, with the number 2,804 118 doubling to 2.5 million EVs on the road within the following six years. This 1,288 outlook cements Thailand’s position as a significant EV investment hub in ASEAN 29,459 1,591 and will enable the country to meet its targets for greenhouse gas reductions and Car (29,459) Car (1,288) the development of its BEV ecosystem. Motorcycle (2,804) Motorcycle (1,591) Tuk Tuk (0) Tuk Tuk (118) Public Fleet Conversion Bus (1) Bus (2) to EVs Boosts Local Truck (0) Truck (0) Ecosystem Source: Department of Land Transport To jump start the adoption of BEV technology, state-enterprises, academic 3 https://www.nstda.or.th/en/news/news-years-2020/1128-electric-bus-prototypes-unveiled-to- institutes, government agencies and prime-minister.html automotive industry associations have taken a leading role in targeting BEV procurement and use in public mass transit. Among their initiatives of promoting EV capacity building, they have collaborated on a contest to facilitate the conversion of traditional combustion buses to electric city transit buses3. From the design plans that were submitted for the contest, four local companies were selected, with each receiving a grant and a retired buses from Bangkok Mass Transit Authority (BMTA) to be developed into an E-bus prototype. The selected prototypes use 40-60% local content and have a capacity to travel at a speed of 80-90 km per hour for a distance of 160-250 km on a single charge. The modifications will cost the BMTA US$ 230,000 per bus, compared to the cost of US$ 400,000- 460,000 for importing new E-buses. In a related development, Thailand’s Ministry of Transport has facilitated battery- driven ferry boats to offer services along the Chao Phraya River and Bangkok’s 10 Thailand Investment Review

Graduate School of Engineering (TGGS) Thailand’s national energy plan for INDUSTRY FOCUS are well-known in the industry. These the EV industry aims to regulate electricity main canals to reduce urban pollution as academies engage in collaborative fees based on a time of use rate, ferry boats are also popular transportation programs with international experts thereby promoting competition among mode for residents. such as RWTH Aachen University of charging business and facilitating a Germany and the Joint Graduate School mix of renewable energy supplies such Upgrading to of Energy and Environment (JGSEE) as roof-top solar cells as an energy Game-Changing program to produce high quality workforce source. The plan targets the adoption of Battery Technology for the industry comprised of MSc. and smart grid technology which analyzes Ph.D. graduates. EV charging data and the country’s The Ministry of Higher Education, Science, The Ministry of Industry is also usage to manage the efficiency of Research and Innovation, EVAT and working with research institutes and the electricity transmission. The Ministry of a number of science and engineering private sector to promote the production Energy has also adjusted the country’s academic institutions have recently joined and use of electric vehicles in the country, power development plan to increase forces to form the Thailand Energy including end-of-life battery systems. the energy generation capacity in Storage Technology Alliance (TESTA) with preparation for the anticipated higher the common aim of driving progress in Ensuring Convenient demand. EGAT5 projects an increase local energy storage technology, which Access to Power Sources of around 9% of electricity usage in is key for electric transportation and a Thailand if around 1.5 million BEVs and cleanenergyindustryecosystem4. TESTA’s To support the transition to EV usage, 800,000 PHEVs are in use by 2036. key approaches are creating a collaborative the Ministry of Industry has ensured Following brisk investment from platform and network as well as ensuring that EV car users will have convenient both the public and private sectors, that R&D, especially on Lithium-ion access to public charging stations data from EVAT show that Thailand batteries, is fully commercialized. across the country with the individual had around 2,000 chargers and 650 As a well-established automotive charging stations being located no more charging stations from 10 developers hub in ASEAN, Thailand benefits from than a 50-70 kilometers radius from countrywide at the end of 2020. Of this the in-depth knowhow of many qualified one another. To stimulate development total, three in five are normal chargers academies and international business in the charging business, three state- while the remainder are quick chargers. associations collaborating on the study enterprises, namely the Electricity The Ministry of Energy has regulated EV of EV technology. These collaborations Generating Authority of Thailand (EGAT), charging rates to ensure cost worthiness, not only increase the competencies of the Metropolitan Electricity Authority (MEA) while charging station developers are students and their readiness to serve and the Provincial Electricity Authority offering mobile EV charging station enterprises but also create new local (PEA), have collaborated to pioneer applications to provide charging station industries through new innovations. investment in both home-based and maps and estimated remaining fuel Academies such as Khon Kaen University, public EV charging facilities and services. amounts as part of the drive to facilitate King Mongkut’s University of Technology Under a comprehensive energy the countrywide adoption of EVs. and Sirindhorn International Thai-German investment plan to prepare for the The opportunities in the development mainstream use of EVs for personal of charging stations also attracted transportation, Thailand aims to develop investment from many start-ups in the a Smart Grid and smart EV charging green energy sector for the sale and system as well as implementing a “vehicle installation of home-based charging units to grid” (V2G) electricity system to ensure and charging systems for residential more efficient power distribution to support and commercial areas. Some of these EV usage. start-ups have partnered with big EGAT, MEA and PEA have formed international EV equipment brands a consortium with PTT Plc to develop while others have focused on importing a prototype for V2G. Using a cloud-based chargers from smaller brands. However, platform, the system compiles the most of these companies tend to use charging profiles and activities of EVs online tools to promote their services, at electricity distributers’ servers to ensure with a few expanding their networks of the country’s electricity load profile dealerships across the country. matches the usage profile at usage time. 4 https://www.nstda.or.th/en/news/news-years-2020/1122-nstda-in-collaboration-with-kku-kmutt-kmutnb-and-evat-to-find-thailand-energy-storage- technology-alliance-testa.html 5 https://www.egat.co.th/index.php?option=com_content&view=article&id=1780&Itemid=333 1 1Thailand Investment Review

HIGHLIGHTS MAKING A FORAY INTO NEXT-GENERATION TRANSPORTATION Thailand’s vision for its automotive industry extends beyond EVs to include the four major trends of cutting-edge transportation. With a commitment to vehicles that are connected, autonomous, shared and electric (CASE), Thailand aims to create a safe, clean and sustainable transportation system. The national target of phasing out traditional combustion vehicles from all new registered cars by 2035 will shape the direction of both the private sector and academic institutions towards these new global mobility trends. On the back of Thailand’s accommodative business environment includes comprehensive facilities to support the creation, and competitive cutting-edge technology, local entrepreneurs development and scaling of innovations. Managed by the are increasingly launching ventures that delve into the next- National Science and Technology Agency, the EECi ecosystem generation transportation mode. One such startup has joined for innovation is comprised of laboratories, testing centers, forces with the National Science and Technology Development facilities for testbeds and field demonstrations to facilitate the Agency to manufacture the first AI self-driving three wheelers. translation of R&D concepts to commercial uses3. The EECi This development reflects Thailand’s drive to be the leader of has also created a regulatory sandbox to support startups ASEAN’s next-generation transportation concept1. and SMEs through the testing and incubation of innovative Thailand’s proven strengths in the areas of the Internet products and services. Providing a convenient setting in of Things (IoT) and next-generation platform capabilities, such which the business community and academic institutions can as cloud computing, will also support the development of big network, the EECi serves as a meeting point for startups and data. It is this established infrastructure which will enable the venture capitalists. The EECi’s innovation facilities, including realization of connected and shared transportation concepts, an autonomous vehicle living lab, support the development of linking vehicles to vehicles, vehicles to infrastructure and CASE vehicles in areas such as AI, battery and energy storage vehicles to smart phones. Thailand is also ready to embrace development, field testing, vehicle navigation and mapping, new opportunities arising from the Mobility as a Service concept and system integration. whereby vehicles can be operated along on-demand routes. Such an enabling environment fosters the research and Given the requirements for these new-generation platforms, development of hardware and software for CASE transportation such as cloud computing and AI, Thailand has sought and modes, as well as for related high-technology industries like attracted huge investment in the Eastern Economic Corridor automation and robotics, digital and smart electronics. (EEC), a special economic zone equipped with 5G, fiber The EEC also houses the first EV Battery Testing Center optics, data centers and various partnerships between the in ASEAN3. Operated by the Thailand Automotive Institute, the public and the private sector as well as academic institutions. facility provides testing of the safety and performance of the The EEC has introduced 21 promoted zones to serve as the EV batteries used in passenger cars and motorcycles as well locations for Thailand’s 12 designated targeted industries and as offering consultation and training services for businesses. drive future economic growth in sectors that include next- The center has also co-invested with TÜV SÜD PSB (Thailand) generation transportation, digital, biotechnology, food for the to develop testing, inspection and certification standards future, smart electronics and robotics2. for EV batteries. Expected to achieve full operation within The EEC Innovation Zone (EECi) is an innovation hub this year, the center initially expects to offer battery testing located at Wangchan Valley in Rayong Province. The EECi services for 50 trials per year. 1 https://www.eeco.or.th/en/promotional-zone 2 https://www.eeci.or.th/en/focused/high-performance 3 http://www.thaiauto.or.th/2012/ 12 Thailand Investment Review

EXECUTIVE TALK DRIVING THAILAND’S ECONOMIC TRANSFORMATION The BOI’s activities are about much more than The emergence of new digital technology granting tax and non-tax incentives to attract such as big data, the Internet of Things, AI, investment. With the ongoing technology disruption machine learning, robotics, 3D printing and the highly uncertain world,Thailand needs and biotechnology along with growing to be resilient. One of the BOI’s objectives in this concerns over climate change have shaped respect is to ensure our incentive policies are used both people’s way of life and business’s as a tool to transform Thailand’s economic activities worldwide, with rapid changes structure in the face of these rapid changes. in consumer behaviors, product innovations and company productivity. As the country’s Ms Duangjai Aswachintachit main organization entrusted with the BOI Secretary General mission of promoting investment, the Thailand Board of Investment (BOI) has played a significant role in each of the developmental stages of the country’s modern economy. Now, the BOI is directing 1 3Thailand Investment Review

EXECUTIVE TALK its investment promotions towards helping the country leverage The government’s focus on the EEC includes major the opportunities arising from global mega trends, while investment and activities in a number of projects, such as coordinating with other government agencies to strengthen the high-speed train linking it with Bangkok, the expansion of Thailand’s position in the new global economic landscape. deep seaports and airports, along with the development of an With many global challenges disrupting global trade and innovation hub, or the EECi, which will increase competitiveness investment such as the COVID-19 pandemic since early 2020, and support high-technology industries. the BOI has introduced new investment privileges aimed at promoting the adoption of digital, automation, and green What are the BOI’s target industries? technology as well as the uptake of sustainability certification among eligible industries. Ms Duangjai Asawachintachit, the We have identified a number of sectors to be targeted for Secretary General of the BOI, explained that the aims of the investment. In addition to the advantages mentioned earlier BOI are that its incentives, targeting both foreign and local of Thailand’s strategic location as a regional business hub, its firms, will help drive Thailand’s economic transformation into well-established infrastructure facilities and the strong supply a more competitive player in the global arena with stronger chain facilitating efficient, resilient and cost-effective business local supply chains making it a key investment destination in activities, we are also improving the legal ecosystem to ensure the Association of Southeast Asian Nations (ASEAN). we offer a business environment that is highly conducive to attracting multinational companies to use Thailand as their What are Thailand’s key regional hub. competitive advantages? One of important sectors is the so-called BCG (Bio, Circular and Green), which is the concept that the Thai Thailand offers a wide range of competitive advantages. Firstly, government announced will be the key driver of the Thai being situated right at the heart of Southeast Asia, Thailand economy in the years to come. This is an initiative that makes enjoys a strategic location that is enhanced by connectivity a lot of sense because Thailand is one of the world’s very few across mainland Indo-China. The Thai government has invested net exporters of food. The country is also a major producer of significantly in infrastructure facilities for many years and will agricultural produces, for which we can add more value by continue to do so in the years to come. With an equivalent of incorporating more technology. The BCG initiative will unlock US$ 68 billion, the government’s investment plan covers all our potential in this and other industries. types of infrastructure and will lead to excellent connectivity In terms of the circular economy, we have a lot of raw with our neighboring countries and beyond. agricultural waste lying around that can be turned into value- Secondly, we also have a very strong supply chain in added products. Last but not least, we want to make sure many key industries, with over 10,000 companies operating we can create and develop industries and services that in the food industry and 2,000 companies in the automotive apply greener technology so that we can pass on a good supply chain. For electronics industry, Thailand is one of the environment to the next generation. As part of our promotion world’s most important manufacturers of hard disk drives and of new technology, Thailand has become the ASEAN hub of storage devices. We also put great effort into transforming the bioplastics industry. our digital infrastructure. Over the past few years, Thailand, Another key sector is the medical industry, with the has invested in a total of eight submarine cables connecting country having established itself as a medical hub in terms us to the rest of the region and the world. We are probably of medical tourism. The value of medical tourism in Thailand the most interconnected of all ASEAN countries, making reached around 600 million U.S. dollars in 2018, which ranked Thailand ideally suited to serve as a digital hub. In addition, Thailand as the fourth-most popular countries worldwide for the Thai government is focusing on developing the Eastern medical tourism. Now with the country’s efficiency in handling Economic Corridor (EEC) to be the new growth hub, not the pandemic, this position as a medical hub has been further just of Thailand but of ASEAN, attracting high technology and reinforced and the government has taken steps to ensure that foreign talents. we can further leverage this potential. Among the initiatives 14 Thailand Investment Review

introduced is the BOI’s recent support measures for clinical What are the key directions EXECUTIVE TALK research as we believe there are highly-promising prospects for the BOI’s investment promotions? for this activity in Thailand. The electronics industry has served as a key sector The BOI’s activities are about much more than granting tax for Thailand for decades. Over the past two years, Thailand and non-tax incentives to attract investment. With the ongoing has played an even stronger role in the supply chain with the technology disruption and the highly uncertain world, Thailand relocation of smart electronics operations to Thailand. needs to be resilient in term of our policy measures. Lastly, while the automotive industry has played a One of the BOI’s objectives in this respect is to ensure significant role in the country’s export and GDP for many years our incentive policies are used as a tool to help companies already, we see there is still huge potential to be unlocked in make adjustments to rapid changes. In doing this, we have this sector, particularly with the new trends for EVs. incentivized companies to transform themselves with our productivity enhancement scheme, which allows existing What roles have the Thai government companies to apply for tax incentives even if they do not and the BOI played in supporting increase their production capacity. The scheme encourages the EV industry? companies to take actions that will lead to productivity improvement. These include investments in (1) reducing energy The automotive industry has been on top of the BOI’s agenda consumption or reducing impacts on environment or using for many decades, in fact, ever since this industry first started renewable energy (2) adopting automation/robotics systems in Thailand during the 1960s. Thailand has been successful (3) adopting digital technology (4) obtaining sustainability in creating product champions, producing one-ton pick-up certification such as FSC and PEFC (5) undertaking R&D trucks as well as developing automotive clusters with strong activities/engineering designs. We believe that investments localization. Now with the rise of EV technology, the challenge or expenditures for these purposes will lead to more productive at hand is in turning the existing cluster into an EV cluster and efficient operations, resulting in enhanced competitiveness. to ensure we retain our position as the region’s leading If existing companies are investing in any of these purposes, automotive producer. they can apply for this scheme even whether they have ever The BOI has recently introduced a second round of been BOI-promoted or not as long as they are engaged in support measures for EVs. We have also expanded the manufacturing or services eligible for BOI promotion. A quick promotional scope of our incentives to cover even more example of these actions is the installation of solar power types of vehicles this time. We now cover two-, three- and systems and replacement of existing machinery with more four-wheelers as well as ships and trucks in recognition of efficient machines or automation systems such as automatic the fact that these types of vehicles can also be electrified. storage and retrieval system (ASRS). We aim to promote the automotive industry’s transformation Given its goal in attracting investments in higher technologies, from ICE clusters to EV clusters as the incentives aim to the BOI has been administering the so called “smart visa” attract newcomers and to support existing players. We are scheme which was launched in 2019. This scheme forms part also working with government agencies such as the Ministry of our efforts in attracting foreign technologies and talents of Finance to ensure we are offering the right ecosystem to in the targeted sectors. We are continuously coordinating support the development of EVs. between government agencies and the private sector and talking to all our counterparts and relevant stakeholders so that we can obtain opinions that will be used to improve the business environment. Is there any final message you would like to share? Thailand has been continuously improving its investment environment, such as through the development of its infrastructure facilities, its legal system including business regulations, its industry ecosystem, and its supporting measures as well as its workforce through extensive reskilling and upskilling efforts. With all these factors combined, I believe Thailand offers a very competitive location for investors now and in the future. The future is here. 1 5Thailand Investment Review

COMPANY INTERVIEW INTERVIEW WITH Asia, Amita Technologies (Thailand), the joint venture formed through the SCoEOmpahndotfeouAnhduenraoif, acquisition, has already won a major Energy Absolute Plc award from R&D100 for its research and development work on solid-state “ WttisatbwtEnohehhanecceeilatTteoohthhraihrecmnnegacatradohyvyqipilnlulieauaoAsEisnTnnigsVbtrmdadyreyesyuitiodwowtezasoavlcentathueterhddcnity,accnel-otwsnhhfobhhoosneleaeheaormoasahsgoaltereosahlipladmeygveobpcsyeAsofeqom.tstewmbruBahtitnrisguiyeiro2ttseneihiauc0nrid.inotg”okTytygamhheueetteycrlcaboinAhooreliisgknnwmntn.heiotgnniritltuigoo,animnlg’elsitine-oeigrsos,n lithium-ion batteries under a collaboration with Taiwan’s Industrial Technology Research Institute. Meanwhile, EA’s wholly owned EV assembling business brand, MINE Mobility, is scheduled to begin production in the second quarter of this year, with a capacity of 10,000-15,000 units annually. EA’s first target for this year is to produce 4,500 of its Mine EVs, all equipped with EA batteries, that were pre-ordered in 2018. EA Anywhere, the company’s subsidiary operating in the area of charging station construction and operation, has already built the majority of the EV charging stations in Thailand, with 400 out of the total 650 charging stations countrywide owned by EA Anywhere. ESnCeorEmgOyphaAnobdtseoFAlouhutenudnPealcri Powering ASEAN’s EV Revolution Energy Absolute Plc (EA ) - often referred to locally as the “Tesla of Thailand” for its ambitious ventures into the EV industry - is aiming to play a significant role in driving the EV revolution forward in Thailand and beyond. Following its acquisition of a 77% stake in Amita Technologies Inc. in 2016, EA has tapped into the Taiwan-based energy storage manufacturer’s lithium-ion technology to develop ASEAN’s largest lithium-ion polymer battery production plant which will have an annual production capacity of up to 50 gigawatt per hours when it becomes fully operational in the next year. In total, the project is worth US$ 3.3 billion. Situated in Thailand’s flagship high-technology special economic zone known as the Eastern Economic Corridor (EEC), the first phase of EA’s battery production is scheduled to begin in the first half of 2021 with an annual capacity of one gigawatt per hour. As part of an end-to-end supply, the batteries produced at the plant will serve the fast-growing market for passenger and commercial EVs while also meeting the demand for clean power generation in the ASEAN region. Underlining its leadership position in the lithium-ion battery technology in 16 Thailand Investment Review

As one of Thailand’s fastest growing How do you see we have seized the opportunity to get COMPANY INTERVIEW companies with the largest market the opportunities in into the industry at an early stage. If we capitalization among renewable energy Thailand’s EV industry? wait to get into the industry after it has companies on the Stock Exchange of already matured, the opportunities for Thailand, EA expects its battery production A: Thailand is an established automotive newcomers will be very limited. and EV assembly operations to generate production base as well as a clean energy steady and sizeable revenues, with as hub in the ASEAN region. With many Please share with us much as one-fifth of its total revenue automotive companies having already your vision for EV and expected to come from EVs in this year. established production bases in Thailand, battery businesses For 2020, EA reported total revenues we already have a large pool of skilled in ASEAN. of US$ 575 million, an increase of 15% and experienced engineering professionals. from 2019, driven mainly by the sale of With its human resources, Thailand is A: We aim very high. We believe that we B-100 and bio-chemicals as well as well prepared to take its EV industry to the can be one of the leading global battery from its solar- and wind-based power next level and become a regional leader. manufacturers. Before we started this generation businesses. EA’s evolution We can already see that Thailand’s project, we had conducted many studies into the EV business has taken 16 years, automotive industry has begun to on the global landscape of the EV after starting a biodiesel business in understand EV technology, even though market and found that many of the firms 2006 and then diversifying into power it is quite different from traditional were focusing on passenger cars rather generation in the form of solar and wind automotive technology. than commercial EVs. We found that energy. EA has earmarked a sizeable While Thailand has the missing one reason why not many people were portion of its investment budget, 45% link in EV’s core technologies, namely looking at the commercial EV segment of US$ 203 million, for its EV business batteries and drive trains, Thai engineers was that it they were heavy duty cars, in 2021. and the local automotive supply chain they would need durable batteries for have been quick to transform the traditional both everyday and long-distant use. EA’s proactive investment approach automotive industry so that it is ready to Secondly, it would be necessary to reflects the confidence of its founder and produce EVs with the technology needed be able to charge the battery quickly. CEO, Mr. Sompote Ahunai, in Thailand’s for the other parts and components Based on the existing ecosystem, these potential to become the hub of EV of EVs. Filling this gap was the reason two factors were difficult obstacles for business activities in ASEAN in line with why EA acquired a controlling share in practical commercial EVs. With our the plan of the Thai government. With Taiwan-based Amita Technologies, a joint venture with Amita Technologies, a competitive automotive supply chain, company which has been in the lithium-ion EA has now overcome these obstacles a large pool of skilled engineers and battery industry for almost 20 years. by developing a special battery which the Thai government’s robust support, With this move, we have brought Amita’s take less time to fully charge and lasts Thailand is attracting huge investment in technology and some of their key longer. its EV and parts industry from automakers engineers to Thailand to close the missing worldwide. link in EV technologies. By combining In this promising market of EVs, we the acquired technology with our own, 1 7Thailand Investment Review

COMPANY INTERVIEW believe that the key for transportation is commercial vehicles, not passenger vehicles. The high margin has driven most businesses to passenger EVs. However, the market will soon overcome the obstacles for commercial EVs and EA will become an early player in the market. With the supply chain linking upstream to downstream businesses, we are well-poised to be a major player in this segment. How do you foresee and the drive trains. The BOI has granted the growth of very high privileges to attract investors. the EV sector in ASEAN? EA has worked closely with the BOI and we have always been very well supported A: Infrastructure is the key factor for when we had any problems. It is important the development of EVs in each to have such an environment that is country in ASEAN. When it comes to so conducive to business. The Thai infrastructure and the strength of the EV government has committed to developing supply chain, we believe that Thailand the ecosystem for the EV sector, which is the most competitive country. The is one of the country’s new S-curve most important underlying factors that targeted industries. The government Thailand has to support EV market has introduced many incentives with growth are GDP per capita and the the aim of supporting the local demand sizeable local market. With these two for EVs because having the demand is factors combined, Thailand has a suitable an important factor for ensuring that an foundation to jump start its market investment can successfully grow. The for EVs, which currently have a more government’s support, coupled with expensive unit price than traditional the country’s robust automotive supply combustion engine vehicles. chain and skilled workforce, is driving In terms of infrastructure, Thailand Thailand to become one of the world’s has an abundant supply of electricity largest EV production hubs. with almost a 50% overcapacity of power generation and one of the best quality How confident are you transmission networks, reflecting the thatThailand will become country’s energy security and readiness ASEAN’s EV hub over for EVs. Thailand is already a key production the next five years? base for many global automakers so they will only have to increase their A: The Thai government has understood investments by marginal amounts to that the global transition to EVs has convert their existing production facilities been slowed down by the COVID-19 so that they can use Thailand as their pandemic. While we are waiting for the EV production base and help make pandemic to subside, there has still Thailand an EV production hub . been a surprising demand for EVs. It’s just a matter of time before the region What roles have the BOI sees a transition to EVs. However, and the Thai government this also depends on how quickly our played in supporting neighboring countries can develop the EV sector? their EV infrastructure. Here in the Thai market, there is great enthusiasm for A: The Thai government and the BOI EVs which will escalate into demand have played an important role in attracting which will then drive Thailand to be the investment to support the development most competitive EV hub in ASEAN. of local EV technology, particularly for overcoming the missing links in the technology chain, which were the batteries 18 Thailand Investment Review

THAI ECONOMY AT-A-GLANCE Key Economic Figures Unemployment Investment Growth Market Profile Dec 2020* GDP (2020*) -240.82%0 250.27%1*f (2019) US$ 506.4 Billion 1.5% Po6p6u.la5t6ion GDP per Capita (2020*) US$ 7,328.2 / Year Million GDP Growth 22.50-231.5*%f Headline Inflation Export Value of Goods Growth MTiHnBim3u1m3 -W3a3g6e -260.12%0 Average 2020* UUSS$$A9p.p98ro-x1i0m.7a1te -260.62%0 250.28%1*f -0.85% Source: Ministry of Labour Note: *Estimated value l Source: NESDC Source: National Statistical Office, Note: *Estimated value (Data as of March 2021) Ministry of Commerce Source: NESDC Top 10 Export Markets (January-December 2020 ) Export Figures Rank Value Share (US$ million) Export value (USD million) United State 14.83% China 34,343.71 12.85% Jan - Dec 2019 : 246,268.8 Japan 29,754.18 9.88% Jan - Dec 2020 : 231,468.4 Hong Kong 22,876.34 4.88% Jan - Feb 2021 : 39,925.6 Vietnam 11,292.25 4.82% Australia 11,163.82 4.25% Singapore 9,828.83 4.10% Malaysia 9,508.92 3.77% Indonesia 8,734.50 3.30% Switzerland 7,650.26 3.25% 7,525.32 International Top 10 Exports Value Share Competitiveness (US$ million) Goods / Products 9.19% Global Competitiveness 21,266.84 8.07% 1. Vehicles and Parts 18,668.85 7.87% 2018 : 38th 2019 : 40th 2. Computers and Parts 18,207.33 5.23% 3. Jewelry 12,113.82 3.44% Source: World Economic Forum 4. Rubber Products 7,971.54 3.09% 5. Plastic Pellets 7,155.14 2.91 % World Digital Competitiveness 6. Integrated Circuits 6,735.69 2.82% 7. Chemical Products 6,528.00 2.31% 2019 : 40th 2020 : 39th 8. Machinery and Parts 5,354.92 2.27% 9. Refined Fuel 5,251.81 Source: IMD 10. Air Conditioners and Parts Ease of Doing Business Source: Ministry of Commerce 2018 : 27th 2020 : 27th Source: World Bank Exchange Rates Tax Rate Corporate Income Tax: 0 - 20% (As of 31 March 2021) Personal Income Tax: 5 - 35% VAT: 7% THB 31.36 THB 43.49 THB 37.08 T(1H00BY2en8).69 THB 4.84 Witholding Tax: 1 - 15% Source: Bank of Thailand Source: the Revenue Department (As of March 2021) 1 9Thailand Investment Review

ABOUT BOI The Office of the Board of Investment (BOI) is the principle goverment agency that operates under the Prime Minister’s Office for the purpose of encouraging investment in Thailand. We at the BOI serve as the professional contact points for investors, providing them with useful investment information and services. We offer business support and investment incentive to foreign investors in Thailand, including tax and non-tax incentives. A few non-tax incentives include granting land ownership to foreigners and facilitating visas and work permits. Besides serving the needs of overseas investors, we also offer consultation services to Thai investors who are interested in investment opportunities abroad. BOI OVERSEAS OFFICES Hanoi Beijing Shanghai Seoul Tokyo Osaka Taipei Guangzhou Jakarta Head Office, Office Of The Board Of Investment Osaka Shanghai Thailand Board of Investment, Thailand Board of Investment, 555 Vibhavadi-Rangsit Road., Chatuchak, Bangkok 10900, Thailand Osaka Office Shanghai Office Tel: (+66) 2553 8111 Fax: (+66) 2553 8315 Email: [email protected] Royal Thai Consulate-General Royal Thai Consulate General, No. 18, Bangkok Bank Building, 7th Floor Wanshan Road, Changning District, Los Angeles Stockholm 1-9-16 Kyutaro-Machi, Chuo-ku Shanghai 200336, P.R. China Thailand Board of Investment, Thailand Board of Investment, Osaka 541-0056, Japan Tel: +86-21-5260-9876, Los Angeles Office Stockholm Office Tel: (81-6) 6271-1395 +86-21-5260-9877 Royal Thai Consulate-General, Stureplan 4C, 4th Floor Fax: (81-6) 6271-1394 Fax: +86-21-5260-9873 611 North Larchmont Boulevard, 114 35 Stockholm, Sweden E-mail: [email protected] Email: [email protected] 3rd Floor Tel: +46 8 463 1158, +46 8 463 1174 Tokyo Beijing Los Angeles CA 90004, USA Fax: +46 8 463 1160 Thailand Board of Investment, Thailand Board of Investment, Tel: +1 323 960-1199 [email protected] Tokyo Office Beijing Office Fax: +1 323 960-1190 Frankfurt 8th Floor, Fukuda Building West, No.21 Guanghua Road, E-mail : [email protected] Thailand Board of Investment, 2-11-3 Akasaka, Minato-ku, Chaoyang District, Beijing, New York Frankfurt Office Tokyo 107-0052 Japan P.R. China 100600 Thailand Board of Investment, Investment Section, Tel: +81 3 3582 1806 Tel: +86 10 85318755-57, New York Office Royal Thai Consulate-General Fax: 81 3 3589 5176 +86 10 85318753 7 World Trade Center Bethmannstr. 58,5.0G 60311 E-Mail: [email protected] Fax: +86 10 85318758 250 Greenwich Street, Suite 34F Frankfurt am Main Seoul E-mail: [email protected] New York, NY 10007, USA Federal Republic of Germany Thailand Board of Investment, Sydney Tel: +1 212 422 9009 Tel: +49 (069) 92 91 230 Seoul Office Thailand Board of Investment, Fax: +1 212 422 9119 Fax: +49 (069) 92 91 2320 #1804, 18th floor, Koryo Daeyeongak Center, Sydney Office E-mail: [email protected] Email: [email protected] 97 Toegye-ro, Jung-gu, Seoul, 100-706, Suite 101, Level 1, 234 George Street, Paris Republic of Korea Sydney, NSW 2000, Australia www.boi.go.th Thailand Board of Investment, Tel: (+82)2 319 9998 Tel: +61 2 9252 4884 Paris Office Fax: (+82)2 319 9997 E-mail: [email protected] 8 Rue Greuze 75116 Paris, France E-mail: [email protected] Jakarta Tel: 33(0)1 56 90 26 00-01 Taipei Thailand Board of Investment, Fax: 33(0) 1 56 90 26 02 Thailand Board of Investment, Jakarta Office E-mail: [email protected] Taipei Office Royal Thai Embassy, Mumbai Taipei World Trade Center Room:3E40 Jl. DR Ide Anak Agung Gde Agung Thailand Board of Investment, No.5 Xinyi Rd., Sec.5, Taipei110 Kav. E3.3 No.3 (Lot 8.8), Mumbai Office Taiwan R.O.C. Kawasan Mega Kuningan, Royal Thai Consulate-General Tel: (886)-2-2345-6663 Jakarta 12950, Indonesia 12th Floor, Express Towers, FAX: (886) 2-2345-9223 Email: [email protected] Barrister Rajni Patel Marg, Nariman Point E-mail: [email protected] Hanoi Mumbai 400021, India Guangzhou Thailand Board of Investment, Tel: +91-22-2204-1589 Thailand Board of Investment, Hanoi Office +91-22-2204-1590 Guangzhou Office 26 Phan Boi Chau Str., Hoan Kiem, Fax: +91-22-2282-1525 Royal Thai Consulate-General Hanoi, Vietnam Email: [email protected] No.36 Youhe Road, Haizhu District, Tel: (84) 24 3823 5092-4 Guangzhou 510310 P.R. China Email: [email protected] Tel: +86-20-8385-8988 ext. 220-225, +86-20-8387-7770 (Direct Line) Fax: +86-20-8387-2700 E-mail: [email protected]