Otodiva – The Thai government is actively providing incentives for electric vehicle as part of efforts to support the clean energy transition. However, This ambitious step actually caused a domino effect that disrupted various industrial sectors in the country. From an oversupply of electric vehicles to negative impacts on conventional car manufacturers, The following are the impacts and lessons that Indonesia can take from this situation.
According to a report from Asia Nikkei, Thailand's massive incentives for electric cars have sparked a number of problems. One of them is the oversupply of electric vehicles on the market. Many industry players in Thailand report that the surge in production of subsidized electric cars has led to fierce price competition between electric cars and cars with conventional engines.. This matter, in turn, affecting conventional car factories which were forced to reduce production and even close their factories. Besides that, a number of automotive parts manufacturers also went bankrupt because they did not get orders from electric vehicle manufacturers.
“Penjualan mobil berbahan bakar fosil mengalami penurunan signifikan setelah subsidi kendaraan listrik diperkenalkan,” kata laporan Asia Nikkei. “Produsen mobil Jepang, which produces approx 90 percent of fossil vehicles in Thailand, adalah yang paling terkena dampak.”
Meanwhile, The spare parts industry was also affected, with at least a dozen parts manufacturers forced to close. This happened because of electric vehicle manufacturers from China, which is fueled by Thai government subsidies, tend not to buy spare parts from local manufacturers.
On the other hand, Indonesia is also in the process of switching to the era of electric vehicles. The Indonesian government has introduced several incentives, such as cutting Value Added Tax (PPN) become 1 percent and exemption from import duties for electric cars with certain conditions. Nevertheless, The price of electric cars in Indonesia is still far from cheap when compared to Thailand.
According to Yannes Pasaribu, automotive observer from the Bandung Institute of Technology (ITB), Thailand's electric car subsidy policy is similar to that in Norway, German, and Japan. Yannes explained that the impact of the presence of electric vehicles is predicted to affect various industrial sectors.
“Di Indonesia, Discussions regarding the impact of electric vehicles began two years ago, especially among assemblers and component supply industries,” ujar Yannes. “Sekitar 45 percent of component industry, especially those that produce parts for internal combustion engines, diperkirakan akan tutup secara bertahap.”
Thailand is known as the center of Japanese car production in Southeast Asia. However, Yannes believes that Japanese manufacturers in Thailand are too confident in the dominance of internal combustion engine technology, which are now starting to be displaced by electric vehicles. Electric car subsidies that are more profitable for Chinese manufacturers have sparked tensions in Japan-China relations in Thailand. This led to a decline in market share and profits for Japanese car manufacturers, as seen from the closure of the Suzuki and Subaru assembly plants in Thailand.
In Indonesia, a similar situation is not yet fully visible. Yannes assesses that electric vehicle policy in Indonesia is still not well integrated between ministries. “Upaya migrasi ke kendaraan listrik berbasis baterai di Indonesia masih terhambat oleh ketidakselarasan antara kementerian terkait,” jelas Yannes. "Besides that, Thailand's GDP per capita is higher than Indonesia's, indicating that Thailand has better purchasing power and consumption ability, yang mendukung pertumbuhan kendaraan listrik mereka.”
With this condition, Yannes suggested that local automotive manufacturers and component suppliers in Indonesia must adapt. One proposed solution is to develop components that are compatible with renewable fuels or biofuels, as an effort to deal with the potential negative impact of future electric vehicle subsidy policies.
Overall, although electric vehicle subsidies in Thailand have had a positive impact in terms of the adoption of green technology, The side effects provide important lessons for other countries like Indonesia. Careful and integrated policies can help reduce the risk of negative impacts that may arise with the transition to electric vehicles.
