A challenging goal, government support, and foreign investment will create a potential real estate market for electric vehicles in Thailand worth at least $6.5 billion by 2030.

Thailand is highly prepared to become a leading manufacturing and innovation hub for electric vehicles (EV) in Southeast Asia, which will significantly impact the country's commercial real estate industry. According to JLL (NYSE: JLL), the growth potential of Thailand's electric vehicle industry, supported by government policies and foreign investments, is projected to be worth at least $6.5 billion (approximately 220 billion baht) by 2030, and will be a key factor in promoting the real estate sector and supporting the country in becoming a regional leader in manufacturing and innovation.

JLL forecasts that the size of the real estate market necessary to support Thailand's electric vehicle industry will depend on various critical factors, particularly the implementation of the “30@30” policy, which is a key initiative of the Thai government aiming for 30% of domestically produced vehicles to be electric by 2030. This condition is crucial for promoting the growth of the industrial real estate market starting from 2023 onwards. The 30@30 policy includes substantial subsidies, tax reductions, and the comprehensive EV 3.5 measures covering the period from 2024 to 2027.

“Thailand has clearly demonstrated through the implementation of the 30@30 policy and EV 3.5 measures that we are committed and driven to become a leading electric vehicle manufacturing hub in the region. These incentives can significantly attract investors, manufacturers, and suppliers in the electric vehicle industry. However, to truly establish the industry's potential on an international level, we cannot overlook the role of commercial real estate, which is fundamental to creating long-term sustainability for the electric vehicle market,” said Michael Glancy, Managing Director for Thailand and Indonesia at Jones Lang LaSalle (JLL).

In 2024, Thailand's strategic push can attract funding into the electric vehicle industry from both domestic and international sources, with a total contracted investment value of approximately $1.8 billion. This substantial funding includes an investment of $1.4 billion (49 billion baht) from electric vehicle manufacturers in China, including BYD, and an investment of $4.4 billion (150 billion baht) from Japanese automakers.

Additionally, to achieve the goals set by the 30@30 policy, which aims for 30% of total vehicle production to be electric by 2030, Thailand needs to produce over 34 GWh of batteries domestically, necessitating the search for production space and areas for this new industry. As of the end of 2023, Thailand had a total of 167,000 electric vehicles, which accounts for 26.4% of the target for 2030, which requires at least 440,000 electric vehicles.

Michael Glancy emphasized that “Research and development are crucial for maintaining Thailand's competitive advantage in the electric vehicle industry, which requires specialized real estate projects that can support high-tech production, mass manufacturing, and efficient connections to the supply chain.”

Several key activities and developments further reinforce that Thailand's electric vehicle industry is growing. To maintain and stimulate this momentum, Thailand should prioritize research and development (R&D) by offering subsidies and tax incentives to automakers that establish research and development centers. For example, major automakers like Hyundai and the China Automotive Technology and Research Center (CATARC) have already set up R&D centers in the country. Additionally, BYD has launched a new parts warehouse in Bangkok, and Tesla has built a comprehensive factory that includes a service center and parts warehouse in one location.

JLL also predicts increased growth across all sectors related to the electric vehicle manufacturing ecosystem, including software and AI integration, battery technology, tires, and rubber parts.

“The influx of foreign investment demonstrates Thailand's competitive advantage in the rapidly growing electric vehicle sector. The combination of government incentives, skilled labor, and existing infrastructure will make Thailand an attractive destination for both new and experienced electric vehicle manufacturers. However, investment in production, research and development, and other real estate within the ecosystem will be the most critical factors in turning Thailand's electric vehicle commitments into sustainable reality, which will differentiate and elevate the Thai industry for decades to come,” Michael Glancy concluded.