China’s EV investment reshapes Thailand’s auto sector as legacy capacity comes under pressure

As China increasingly redirects trade, capital, and industrial capacity, third-country economies are being reshaped by how deeply they are pulled into Chinese-centered supply chains.

Thailand is an example. It’s transitioning to EVs – partly for its climate goals, but also aiming to future-proof its auto sector against the demise of internal combustion engines. Subsidies and duty waivers have allowed more imports from Chinese firms, which are also being required to boost Thai-based EV production (and face overcapacity back home).

As Chinese firms build new facilities and their low-cost imports enter the market, capacity utilization for Thailand’s auto factories has been steadily shrinking. Thai automakers have signalled their dissatisfaction with this policy regime.

CEIC users can click through for more charts on how Thailand is keen to become a long-term hub for EV components and exports that leverage its trade networks. The situation is an example to consider for countries like Canada, which recently allowed Chinese EVs access to its market as part of a deal that seeks technology transfer to local factories.