In the EV future, Thailand, the ‘Detroit of Asia,’ could be a key China hedge for automakers
Visitors inspect a Tesla Model Y car during the 40th Thailand International Motor Expo at the Impact Challenger hall in Nonthaburi.
Sopa Images | Lightrocket | Getty Images
Tesla has a lot going on. A significant slump in sales, stoking concerns among investors and industry analysts, in an EV market where aggressive price cuts have been needed to spur demand, have tied into decisions made by Elon Musk’s company to lay off workers and scale back spending on its EV Supercharger network. Tesla’s stock price has declined by over 30% this year.
Then, there’s the whole trade war with China, in which Musk holds a unique position.
The U.S. government is determined to limit China’s ability to, as it says, “flood” the U.S. market with renewable energy products, including its rapidly growing supply of EVs, with models priced as low as $10,000. But Tesla has a major operation in China, similar in some ways to Apple, a market key to both its manufacturing and consumer demand. That has all put Musk under considerable pressure to unlock new growth frontiers while navigating challenges of increased competition, supply chain disruptions, and rising raw material costs.
The EV giant appears is paying more attention to the vast potential of Asia beyond China, one of the hottest EV markets. In addition to its well-known interest in India, Tesla is taking a closer look at Thailand, the EV capital of Southeast Asia, where green mobility is rapidly gaining traction.
Thai government officials have touted talks with Tesla as Musk scouts locations for the next gigafactory — Thailand has been part of those deliberations for a few years, as has India, where Musk was scheduled to pay a recent visit before he canceled it, citing issues at Tesla that needed to be dealt with — he did pay a visit to China soon after. The Southeast Asia region, no doubt, holds the potential to provide Tesla with a sizeable customer base to diversify away from overreliance on Europe and the U.S., and a distinct option for manufacturing apart from its existing operations in China and interest in India.
Tesla did not respond to requests for comment.
‘The Detroit of Asia’
Thailand, known as the “Detroit of Asia” for many years already due to its skilled workforce and success attracting many international auto companies, can help Tesla to reduce its dependence on China. With a manufacturing base in Thailand, Tesla could also serve Asian markets and beyond, potentially replicating China’s rapid growth trajectory.
“Thailand is a possible path to China-like auto parts costs, allowing low-cost production,” says Craig Irwin, senior research analyst at Roth Capital who covers Tesla. “Thailand is an option since it’ll give continuity of access to the supply chain that supports the Shanghai facility, but not regulated by Beijing.”
This comes at a crucial juncture for new demand, with the U.S. administration significantly cutting back on EV tax credits available to consumers based on Chinese sourcing in the manufacturing process — though some critics say the rules are not strict enough. The Thai government offers its own subsidies and tax incentives to propel EV adoption and attract foreign manufacturers.
“There are fewer political implications of exporting vehicles from Thailand to markets like the U.S. or E.U. versus China,” said Seth Goldstein, equities strategist at Morningstar, who covers Tesla.
While vehicles made in Thailand may not qualify for the Inflation Reduction Act subsidies, they are less likely to face steep tariffs that have been imposed on Chinese vehicles in the U.S., Goldstein said, and many market expects worry about tariffs which could increase even more if Donald Trump is reelected. A Trump reelection is not even necessary: the Biden administration may introduce 100% tariffs on Chinese EVs next week, according to reporting on Friday.
There’s also a very large market to sell into where U.S. tariffs won’t matter at all: the 650 million people in Southeast Asia that can directly access one of ASEAN’s largest automotive markets, according to Tu Le, founder of the Beijing-based consultancy Sino Auto Insights, who has worked from Detroit to China.
A more affordable Tesla
What’s called the “China Plus One” supply chain strategy is gaining momentum across industries amid geopolitical uncertainty and the ongoing U.S.-China trade spat — even before the latest reports, President Biden has been in many respects as hawkish as Trump on China.
However, the affordable mass-market vehicle that has so far eluded Tesla will be a key to achieving large sales volumes in the region. “A Model 3 or Y will still be too expensive for those markets to be high volume products for Tesla,” Le said.
Tesla said in its recent earnings that is it accelerating the launch of “new vehicles, including more affordable models” — with plans for a highly anticipated $25,000 model by 2025. But the company also made clear that much of that will take place on current manufacturing lines before investing in any new facilities.
Notably, Tesla launched Model 3 and Model Y in Thailand in 2022, but has struggled against the onslaught of Chinese rivals like China’s BYD and Xiaomi that offer a wide range of products, from high-end to affordable. In fact, BYD manufactured over three million EVs in 2023, exceeding Tesla’s production for the second year in a row.
Models presenting the Chinese automaker’s electric car, the BYD Song MAX, at the 45th Bangkok International Motor Show 2024 in Nonthaburi Province, on the outskirts of Bangkok, Thailand, on March 30, 2024.
Nurphoto | Nurphoto | Getty Images
Recent reporting from Nikkei Asia indicated that Tesla’s Model 3 sedan pricing has been cut 9% to 18% lower in Thailand, as its auto market joined the global slump and as BYD, Great Wall Motor, and other Chinese EV makers prepare to start their own production in the country. Chinese EV makers, including BYD, have earmarked $1.44 billion in new production facilities in Southeast Asia’s second-largest economy.
“The price war is not going to end very soon,” Naruedom Mujjalinkool at Krungsri Securities, told Nikkei Asia.
Tesla Thailand recently rolled out a special financing program to spur more sales.
Thailand is a leading global automaker
Steven Dyer, a former Ford executive and managing director at the Shanghai-based arm of consulting firm AlixPartners, said Thailand’s existing auto infrastructure, labor force and policy all provide the potential for it to become a big player in EV manufacturing. But as important is automakers seeing enough of consumer market for locally made supply. In the auto industry, he said, a rule of thumb is “make where you sell,” which reduces freight and customs duty costs, and mitigates the risks of currency exchange.
Southeast Asia is a growing auto market, and Thailand is already the region’s biggest car producer and exporter, with Toyota, Honda, Nissan, Ford, GM and Mercedes-Benz having already embraced Thailand as a regional headquarters.
German President Frank-Walter Steinmeier (l) has an employee explain the production processes to him during a visit to the Mercedes-Benz plant near Bangkok. Mercedes-Benz produces 13 different car models in Thailand with over 1,000 employees.
Picture Alliance | Picture Alliance | Getty Images
The country is striving to become a leading global manufacturing powerhouse through favorable tax benefits and import duties, but it also has a long way to go to convert current auto production to be EV-ready. By 2030, Thailand aims to convert 30% of its annual production of vehicles to EVs, which equates to 725,000 cars and 675,000 motorcycles — it is a market where motorbikes are also hugely important from both the manufacturing and consumer perspective.
Le says the country has an advantage, but will still have to play its cards right. “All ASEAN countries are looking to recruit EV manufacturers to their shores, but I’d say Thailand and Vietnam are two countries that hold an advantage over the others due to their automotive experience,” he said.
Leading legacy automakers, including Honda and Toyota, have committed a $4.1 billion to produce EVs in Thailand.
The Thai government is offering foreign EV manufacturers significant incentives, including up to 40% cuts on import duties and a reduced excise tax rate of 2% for fully assembled EVs imported in 2024 and 2025, provided they start producing in Thailand by 2027, according to Narit Therdsteerasukdi, secretary-general of the Thailand Board of Investment.
Dyer said if a U.S. automaker succeeds in faraway markets with EVs, “it brings familiarity of the various U.S. brands to more consumers, which often helps build momentum for other compatriot carmakers in those markets.”
Thailand’s discovery of nearly 15 million tonnes of lithium deposits — a current key in battery chemistry — could give the country another edge over Asian rivals in attracting EV makers.
“If Thailand becomes a market where EVs or their components can be cheaply produced and freely exported, then I’d imagine many larger EV producers would consider building operations in the country,” Goldstein said, including Tesla.
Risks for Musk’s EVs in Asia
There are risks for Tesla within Asia. Some experts have raised concern that if Tesla effectively competes with Chinese rivals in China and the broader Asian market, China could cut off Tesla’s access to low-price parts. Thailand’s emergence as a manufacturing hub would help cushion such a blow.
Moreover, “if Thailand-produced EVs would qualify for Inflation Reduction Act subsidies, then that would create a strong incentive to produce vehicles or batteries there to export,” Goldstein said.
As of now, the U.S. government rules are buying U.S. companies “time to design, develop, and manufacture more competitive EVs at reasonable prices,” Le said.
Yet, without a cheaper entry-level model, U.S. EV makers like Tesla may be hamstrung against Chinese rivals ramping up production and rolling out models across a much wider price range.
“Tesla can compete in luxury automotive segments by producing vehicles locally in China, but the U.S. as an EV market is well behind China,” Goldstein said.
Tesla’s anticipated $25,000 entry-level vehicle, dubbed the Model 2, could help turn the tide amidst a sales decline and fierce Chinese competition, but as with all things Tesla, promises and timelines lead the experts to remain cautious, if not outright skeptical. Le says Tesla may already be too late in an Asian market that has already become more competitive $11,000 Chinese EVs. “Europe and the U.S. still hold promise for an ‘affordable’ Tesla, but the significance for the Asian market will be much more limited because of ‘China EV Inc’,” he said.
That doesn’t mean it’s not a big opportunity: Goldstein believes an affordable Tesla model could help the company grow to five million deliveries in 2030, especially in the U.S. and EU, where Tesla can manufacture locally to avoid tariffs. It’s just not one that may favor a major play for the Southeast Asian consumer, even if the market is too large to ignore entirely.
“ASEAN and South Asia are key markets for Tesla’s future, but Chinese EV makers have really complicated their path to global dominance in the future,” Le said.
Chinese EVs already make up 60% of worldwide sales, according to International Energy Agency.
“The mystique of the Tesla brand has started to wear globally and it’s partly due to the fact that their best-selling products have been largely unchanged for three to four years,” Le said.
Japanese equipment giant Kubota brought 22 new or updated machines to the 2025 bauma expo earlier this year, but tucked away in the corners was a new retrofit kit that can help existing customers decarbonize more quickly, and more affordably.
No matter how badly a fleet may want to electrify, harsh economic realities and the greater up-front costs typically associated with battery electric remain high hurdles to overcome, but new retrofit options from major manufacturers are popping up to help lower those obstacles.
The latest equipment maker to put its name on the retrofit list is Kubota, who says its kit can be installed by a trained dealer in a single day.
That’s right! By this time tomorrow, your diesel-powered Kubota KX019 or U27-4 excavator (shown) could be fitted with an 18 or 20 kWh li-ion battery pack and electric drive motors and ready to get to work in a low-noise or low-vibration work environment where emissions are a strict no-no. Think indoor precision demolition or historic archeological excavation.
Then, if necessary, it can go right back to diesel power.
From diesel to electric and back again
If that sounds familiar, that’s because we’ve talked about a similarly flexible power solution from ZQUIP. The battery packs and diesel engines are much larger in that application, but the basic sales pitch remains the same: electric when it benefits your operation, diesel it doesn’t.
Kubota says its modular retrofit kits is a response to the increasing global demand for sustainable alternatives by focusing on making machinery that’s flexible and repairable enough to be “reusable,” and offer construction fleet managers a longer operational lifespan, superior ROI (return on investment), and lower TCO (total cost of ownership) than the competition.
Kubota’s solution also notably reduces maintenance costs and operational overheads. With no engine and associated components, servicing time and expenses are considerably reduced, saving customers both time and money. Additionally, with electricity costing far less than fossil fuels, it offers a highly economical advantage.
International Rental News reports that other changes to the excavators include a more modern cab controls with a digital instrument cluster, a 60 mm wider undercarriage for more stability, and an independent travel circuit allows operators to use the boom, dipper, bucket, and auxiliary functions without an impact on tracking performance.
Kubota’s new kit, first shown at last year’s Hillhead exhibition in the UK, will officially be on sale this summer – any day now, in fact – though pricing has yet to be announced.
Electrek’s Take
If you’re wondering how it is that we’re still talking about bauma 2025 a full quarter after the show wrapped up, then I haven’t done a good enough job of explaining how positively massive the show was. Check out this Quick Charge episode (above) then let us know what you think of Kubota’s modular power kits in the comments.
SOURCE | IMAGES: Kubota, via International Rental News.
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Elon Musk isn’t happy about Trump passing the Big Beautiful Bill and killing off the $7,500 EV tax credit – but there’s a lot more bad news for Tesla baked into the BBB. We’ve got all that and more on today’s budget-busting episode of Quick Charge!
We also present ongoing coverage of the 2025 Electrek Formula Sun Grand Prix and dive into some two wheeled reports on the new electric Honda Ruckus e:Zoomer, the latest BMW electric two-wheeler, and more!
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Environment
FERC: Solar + wind made up 96% of new US power generating capacity in first third of 2025
Solar and wind accounted for almost 96% of new US electrical generating capacity added in the first third of 2025. In April, solar provided 87% of new capacity, making it the 20th consecutive month solar has taken the lead, according to data belatedly posted on July 1 by the Federal Energy Regulatory Commission (FERC) and reviewed by the SUN DAY Campaign.
Solar’s new generating capacity in April 2025 and YTD
In its latest monthly “Energy Infrastructure Update” report (with data through April 30, 2025), FERC says 50 “units” of solar totaling 2,284 megawatts (MW) were placed into service in April, accounting for 86.7% of all new generating capacity added during the month.
In addition, the 9,451 MW of solar added during the first four months of 2025 was 77.7% of the new generation placed into service.
Solar has now been the largest source of new generating capacity added each month for 20 consecutive months, from September 2023 to April 2025.
Solar + wind were >95% of new capacity in 1st third of 2025
Between January and April 2025, new wind provided 2,183 MW of capacity additions, accounting for 18.0% of new additions in the first third.
In the same period, the combination of solar and wind was 95.7% of new capacity while natural gas (511 MW) provided just 4.2%; the remaining 0.1% came from oil (11 MW).
Solar + wind are >22% of US utility-scale generating capacity
The installed capacities of solar (11.0%) and wind (11.8%) are now each more than a tenth of the US total. Together, they make up almost one-fourth (22.8%) of the US’s total available installed utility-scale generating capacity.
Moreover, at least 25-30% of US solar capacity is in small-scale (e.g., rooftop) systems that are not reflected in FERC’s data. Including that additional solar capacity would bring the share provided by solar + wind to more than a quarter of the US total.
With the inclusion of hydropower (7.7%), biomass (1.1%), and geothermal (0.3%), renewables currently claim a 31.8% share of total US utility-scale generating capacity. If small-scale solar capacity is included, renewables are now about one-third of total US generating capacity.
Solar is on track to become No. 2 source of US generating capacity
FERC reports that net “high probability” additions of solar between May 2025 and April 2028 total 90,158 MW – an amount almost four times the forecast net “high probability” additions for wind (22,793 MW), the second-fastest growing resource. Notably, both three-year projections are higher than those provided just a month earlier.
FERC also foresees net growth for hydropower (596 MW) and geothermal (92 MW) but a decrease of 123 MW in biomass capacity.
Taken together, the net new “high probability” capacity additions by all renewable energy sources over the next three years – i.e., the bulk of the Trump administration’s remaining time in office – would total 113,516 MW.
FERC doesn’t include any nuclear capacity in its three-year forecast, while coal and oil are projected to contract by 24,373 MW and 1,915 MW, respectively. Natural gas capacity would expand by 5,730 MW.
Thus, adjusting for the different capacity factors of gas (59.7%), wind (34.3%), and utility-scale solar (23.4%), electricity generated by the projected new solar capacity to be added in the coming three years should be at least six times greater than that produced by the new natural gas capacity, while the electrical output by new wind capacity would be more than double that by gas.
If FERC’s current “high probability” additions materialize, by May 1, 2028, solar will account for one-sixth (16.6%) of US installed utility-scale generating capacity. Wind would provide an additional one-eighth (12.6%) of the total. That would make each greater than coal (12.2%) and substantially more than nuclear power or hydropower (7.3% and 7.2%, respectively).
In fact, assuming current growth rates continue, the installed capacity of utility-scale solar is likely to surpass that of either coal or wind within two years, placing solar in second place for installed generating capacity, behind only natural gas.
Renewables + small-scale solar may overtake natural gas within 3 years
The mix of all utility-scale (ie, >1 MW) renewables is now adding about two percentage points each year to its share of generating capacity. At that pace, by May 1, 2028, renewables would account for 37.7% of total available installed utility-scale generating capacity – rapidly approaching that of natural gas (40.1%). Solar and wind would constitute more than three-quarters of installed renewable energy capacity. If those trend lines continue, utility-scale renewable energy capacity should surpass that of natural gas in 2029 or sooner.
However, as noted, FERC’s data do not account for the capacity of small-scale solar systems. If that’s factored in, within three years, total US solar capacity could exceed 300 GW. In turn, the mix of all renewables would then be about 40% of total installed capacity while the share of natural gas would drop to about 38%.
Moreover, FERC reports that there may actually be as much as 224,426 MW of net new solar additions in the current three-year pipeline in addition to 69,530 MW of new wind, 9,072 MW of new hydropower, 202 MW of new geothermal, and 39 MW of new biomass. By contrast, net new natural gas capacity potentially in the three-year pipeline totals just 26,818 MW. Consequently, renewables’ share could be even greater by mid-spring 2028.
“The Trump Administration’s ‘Big, Beautiful Bill’ … poses a clear threat to solar and wind in the years to come,” noted the SUN DAY Campaign’s executive director, Ken Bossong. “Nonetheless, FERC’s latest data and forecasts suggest cleaner and lower-cost renewable energy sources may still dominate and surpass nuclear power, coal, and natural gas.”
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