China’s EV Makers Ignite Price War in Thailand with Up to 38% Off
Chinese electric vehicle manufacturers, facing intense competition domestically, have extended their aggressive discounting strategies to Thailand in an effort to attract budget-conscious consumers. The savings are striking: BYD Co. reduced the sticker price of its Seal electric sedan by as much as 38 per cent in October and is providing compensation if further price reductions occur this year on certain other models. Meanwhile, SAIC Motor Corp. is offering its MG4 electric hatchback at a 27 percent discount, while Chery Automobile Co. has made a striking entrance with the Jaecoo J5 — featuring promotional pricing — securing nearly 20,000 orders despite a two-month delivery wait. “I have never been this busy,” said Thawee Chongkavanit. The significant discounts have driven a surge of over 20 percent in sales during both October and November, further propelling a shift away from traditional Japanese brands—historically the most favored in Southeast Asia’s third-largest auto market—toward Chinese electric vehicle manufacturers.
However, it also underscores a critical pressure point for the sector. Manufacturers are implementing price reductions to eliminate excess inventory as they strive to achieve ambitious production targets in Thailand. While that provides a temporary increase in sales, automakers are jeopardizing a longer-term effect from oversupply, as potential buyers, expecting even larger discounts ahead, may choose to delay their purchases. “These repeated reductions are damaging to the market, creating fear among buyers who worry that EV prices will drop even further if they purchase now,” stated Krisda Utamote. “EV production exceeds demand, and supply is not aligning with market needs due to the economic environment and tighter auto-loan controls imposed by financial institutions.” Indicators of stress are already beginning to surface. Last month, the government announced an extension of the deadline for electric vehicle manufacturers to comply with local production requirements, granting an additional six months until June 30 to secure credits necessary for exporting vehicles. The deadline for buyers to register for subsidies has also been extended by a month, now set to conclude at the end of January.
These actions are a reaction to worries regarding oversupply — a notable characteristic of the EV market in China, where less-competitive participants are being eliminated. In Thailand, Neta has illustrated the boom-to-bust risk of the sector, facing challenges in meeting government production targets even prior to its parent company, Hozon New Energy Automobile Co., initiating bankruptcy proceedings in China, as reported. “Some dealers are now selling EV models at cost, or even at a loss, to keep volumes moving,” said Jaruaypornphatra Leesomsiri. “There have been some complaints about automakers’ sole focus on sales while offering very bad services,” she stated. “That will hurt the brand in the future.” Buyers have turned to social media to voice their frustration over the rapid decline in prices following their purchases. In a discussion within a BYD Facebook community group, one member reported that their car had depreciated by a fifth in merely a month, while another shared that their year-old vehicle has an outstanding loan that surpasses the price of purchasing the same model brand new today. A third individual cautioned purchasers to remain vigilant, highlighting the potential for additional price decreases as manufacturers strive to meet sales objectives.
Some shoppers are already responding to that warning. “I’m thinking of switching, but I’m hesitant to make a decision because prices might fall even further,” said 31-year-old marketing officer Supreeya Watcharakorn, who is considering swapping her gas-guzzling Toyota Motor Corp. Vios sedan for a new BYD Dolphin hatchback. At the heart of industry pressure are the substantial incentives introduced by Thailand in 2022 to enhance its electric vehicle capabilities. Subsidies of up to 150,000 baht ($4,700) per electric vehicle are included, contingent upon automakers producing at least three vehicles domestically for every two they import by the end of this year, alongside another program running until 2027 offering rebates of up to 100,000 baht for models priced under 2 million baht. However, companies are required to repay subsidies if they fail to fulfill manufacturing obligations. In summary, EV manufacturers must collectively produce approximately 30,000 vehicles domestically in the last two months of the year, according to the Federation of Thai Industries. Chinese brands have taken the lead, with BYD, Changan, and Chery building large-scale capacity, enabling them to gain market share over Toyota and Honda, which lack qualifying EV models. Unlike China, Thai authorities have made limited efforts to curb discounting, suggesting sustained pressure and potentially prolonged low prices as production quotas rise and subsidies are reduced. “The recent price cuts may stabilize once quotas are met,” analyst Joanna Chen said. “Thailand’s EV policies are becoming more stringent, and automakers will encounter increased production quotas — along with heightened competition — in the coming years.”
