On July 4th, BYD’s factory in Thailand was completed and put into operation. In a fierce price war, the Chinese electric vehicle manufacturer offered more discounts for its ATTO 3 SUV, angering existing BYD car owners in Thailand.
According to Nikkei Asia, BYD provided discounts up to 340,000 Thai baht (9,460 USD) for its new ATTO model, reducing the resale value for existing BYD owners in Thailand.
Dalakorn told Nikkei Asia, “I was informed that after the government subsidies expire, prices will increase within two months. Normally, insurance covers 80% of the new car value and depreciates by 10% annually, but the discount pushed it lower.” He bought a BYD ATTO car in January 2023, just a month after BYD was launched in Thailand.
With bank loans and a government subsidy of 100,000 Thai baht, Dalakorn spent 1.19 million Thai baht to buy the SUV. However, even the latest ATTO model released earlier this year is priced below 1 million Thai baht.
“If you announced a price drop of 340,000 Thai baht a year later, do you think anyone would still buy your car?” he couldn’t help but ask.
Dalakorn organized other BYD car owners on Facebook to discuss the possibility of a collective lawsuit. The Consumer Protection Committee has received complaints and is investigating BYD and its competitors’ increasing discounts under the directive of the Minister of the Interior.
China’s dumping of electric vehicles overseas has sparked backlash in Europe and the United States. In June, the EU announced temporary tariffs on Chinese-made electric vehicles due to unfair subsidies in the Chinese battery-electric vehicle (BEV) value chain, posing economic threats to EU BEV manufacturers. In May, the US announced a 100% tariff on Chinese electric vehicles.
Thailand is the second-largest automobile market in Asia. The price war comes as the country faces triple threats of weak economic growth, high consumer debts, and oversupply of electric vehicles (mainly imported from China).
According to the Thai Revenue Department, since the introduction of electric vehicle subsidies in 2022, 185,029 electric vehicles have been imported. Data from the Thai Department of Land Transport shows 86,043 newly registered electric vehicles, indicating an oversupply of at least 90,000 electric vehicles.
Krisda Utamote, CEO of EVAT, previously stated in Nikkei Asia, “We are experiencing an oversupply of electric vehicles because a large number of electric vehicles imported from China over the past two years are still in dealer inventories.”
Utamote added that more Chinese electric vehicle manufacturers are investing in production in Thailand.
The oversupply of electric vehicles has triggered a price war in the Thai internal combustion engine car industry, which is currently suffering from production cuts and factory closures.
This consequence has spread to the supply chain, with at least a dozen component manufacturers closing down because most Thai component manufacturers did not receive orders from Chinese electric vehicle manufacturers.
The Federation of Thai Industries has lowered its annual production target from 1.9 million to 1.7 million vehicles. Meanwhile, potential Thai buyers are delaying car purchases, hoping for more discounts from automakers by year-end. Car sales in the first six months of this year dropped by 24% compared to the same period in 2023. In June, only 47,600 vehicles were sold, almost 17,000 less than the previous year.
Meanwhile, according to the financial reports for the first half of the year released in mid-July, Thai banks are experiencing a contraction in loan portfolios due to sluggish demand for automobiles.