What’s Tesla Doing in Thailand?

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Experiences this week are that Tesla is seeking to construct a manufacturing facility in Thailand. The American firm is alleged to be speaking to the federal government of Thailand in regards to the potential manufacturing unit. Tesla already carried out a web site survey in late 2023.

It’s not clear if this manufacturing unit would produce vehicles or batteries, or each. It could possibly be that Tesla is seeking to get round anti-China insurance policies and potential insurance policies within the US and Europe with manufacturing in Thailand. Or it may simply be that Tesla sees extra demand within the area and sees Thailand as a superb place to put down roots and work on satisfying that demand. The Thai authorities says it has provided Tesla 100% inexperienced vitality for the manufacturing unit, and certainly varied different incentives.

Elon Musk has stated many occasions that Tesla would want many extra gigafactories with the intention to meet its long-term car manufacturing and gross sales targets. It’s not good to have too lots of your eggs in a single basket, or an excessive amount of manufacturing capability depending on one authorities, so it’s at all times been anticipated that Tesla would construct gigafactories in additional nations. Thailand simply looks as if one of many subsequent logical locations to develop operations and manufacturing.

“Thailand is Southeast Asia’s largest automobile producer and exporter, and aspires to change into the area’s principal EV manufacturing hub,” Reuters writes. “The nation has already drawn over $1.44 billion in funding commitments from Chinese language EV producers.”

One factor that throws a crimp in all of that is that Tesla’s gross sales development has slowed fairly a bit up to now yr and is more likely to get slower nonetheless in 2024, perhaps a lot slower. So, it appears Tesla isn’t actually in want of a lot manufacturing capability enlargement for the time being. Nonetheless, the corporate is growing a smaller, lower-cost automobile that’s supposed to provide Tesla its subsequent massive gross sales enhance as soon as it involves market and manufacturing ramps up. As soon as that’s the case, Tesla will presumably wish to produce this cheaper automobile in massive volumes in varied markets the place will probably be bought in excessive volumes. Southeast Asia undoubtedly seems like a spot the place Tesla may goal gross sales of a extra inexpensive, smaller electrical automobile, and “made in Thailand” most likely sits higher with many consumers than “made in China” in a few of these nations.

In any case, it’s all hypothesis for now. It seems like Tesla will create a manufacturing unit and produce one thing in Thailand, but it surely’s not clear how lengthy that can take, what volumes are focused, or even when it is a critical chance or consideration. Recall that Tesla has thought-about constructing a manufacturing unit in India for a number of years. We’ll have to attend for extra info on this because it develops.

One factor we do know is that BYD is already in or getting into varied markets in Southeast Asia, in different elements of Asia, in Africa, in South America, and in Central America. The BYD Dolphin grew to become a fast hit in Thailand final yr. In concept, Tesla ought to be competing on this and all different markets the place BYD is rising — as soon as it has its extra inexpensive, smaller electrical automobile available on the market.

Some other ideas on Tesla’s potential foray into Thailand?