Written by Chaiyut Sittbonsarng
RAYONG, Thailand (Reuters) – China’s BYD opened an electric vehicle factory in Thailand on Thursday, the company’s first in Southeast Asia, a fast-growing regional market for electric vehicles where it has become the dominant player.
“Thailand has a clear vision for electric vehicles and is entering a new era in automobile manufacturing. We will bring technology from China to Thailand,” BYD CEO Wang Chuanfu said at the opening ceremony.
The BYD plant is part of a wave of more than $1.44 billion in investments by Chinese electric carmakers setting up factories in Thailand, helped by government subsidies and tax incentives.
Hong Kong-listed shares of BYD, the world’s largest electric vehicle maker, rose 1.6% to HK$235, after hitting a one-week high.
Thailand is a regional hub for automobile assembly and export, and has long been dominated by Japanese automakers such as Toyota Engine (NYSE:), Honda Motor Co. (NYSE:) and Isuzu Motors.
By 2030, the country aims to convert 30% of its annual production of 2.5 million vehicles to electric vehicles, according to a government plan.
“BYD uses Thailand as a production hub for exports to ASEAN and many other countries,” said Narit Thirdstirasukdi, secretary-general of the Board of Investment of Thailand, referring to the 10-nation Southeast Asian bloc.
As part of its expansion outside China, BYD is building its first European production base in Hungary.
The BYD factory is scheduled to start operations within three years and will produce electric and plug-in hybrid vehicles for the European market, where the European Commission has imposed tariffs of up to 38% on electric cars made in China.
Electric cars made by BYD in China will be subject to tariffs of about 17%.
The massive Thai facility, announced two years ago and valued at $490 million, will have a production capacity of 150,000 vehicles a year, including plug-in hybrids.
The right-hand drive electric cars being built at the plant could potentially allow BYD to bypass EU tariffs that apply to vehicles made in China.
“We will also assemble batteries and other important parts here,” said Liu Xueliang, general manager of BYD Asia-Pacific.
Thailand is BYD’s biggest overseas market, which accounted for 46% 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 competing electric vehicle companies in the local market include Great Wall Motor, which also has a production facility in Thailand, and US automaker Tesla (NASDAQ:).