An electric vehicle (EV) charges at last year’s Motor Expo. EV applications contributed to placing the automotive sector on top in terms of investment value. (Photo: Pattarapong Chatpattarasill)
Thai and foreign companies filed a total of 784 applications for investment promotion during the first six months of 2022, an increase of 4% from the same period last year, but the combined investment value dropped by 42% year-on-year to 219.7 billion baht.
According to the Board of Investment (BoI), investment applications in target industries accounted for 70% of total investment value in the first half, with 358 projects worth a combined 153.5 billion baht.
The automotive and digital sectors saw the highest growth rates during the six-month period.
Duangjai Asawachintachit, the BoI’s secretary-general, said after a board meeting on Wednesday electric vehicle (EV) applications also contributed to placing the automotive sector on top in terms of investment value with a combined 42.4 billion baht, an increase of 212% over the corresponding period last year.
Meanwhile, the value of investment applications in the digital sector grew by 202% to 1.45 billion baht.
During the first half, 395 projects were foreign direct investment (FDI) applications with a combined value of more than 130 billion baht.
Taiwan was the main source of FDI applications during the period with 19 projects, worth a combined 38.5 billion baht, accounting for 30% of FDI project value.
Next came Japan, China, the US and Singapore, with investment values of 16.9 billion baht, 15.5 billion baht, 11.3 billion baht and 8.7 billion baht, respectively.
In terms of investment locations, the Eastern Economic Corridor, Thailand’s prime industrial area, continued to attract the biggest chunk of applications with a total of 217 projects worth over 104.9 billion baht.
Investment applications for productivity enhancement incentives continued to grow, particularly those investing in in-house renewable energy production and the use of automation systems, in line with the global sustainability trend which focuses on reducing the effects of climate change.
“Though the global economic outlook faced increased challenges in the first half of the year, we will continue to monitor the situation and adjust our policies and incentives to ensure Thailand remains the resilient destination of choice for global investors in fast-growing sectors such as electric vehicles,” said Ms Duangjai.
For the whole year, the board expects investment applications to top 400-500 billion baht. In the second half more large-scale investment projects, particularly from automobiles, processed agricultural industries, petrochemicals, chemicals and EVs are likely to apply for investment privileges.
“EV industry, in particular, tends to grow further,” she said. “The BoI has already approved 26 EV investment projects from 17 companies with a combined production capacity of 838,755 units. The board is upbeat that overall EV production will reach 900,000 to one million units by late this year or early next year.”
In a related development, the BoI also on Wednesday approved a combined 44.5 billion baht worth of investment applications for four large-scale investment projects including a Chinese investment project worth 17.9 billion baht to produce battery electric vehicles (BEV) as well as plug-in hybrid electric vehicles (PHEV) in Rayong, and PTT Plc’s project which received approval for an 18 billion baht investment in a natural gas production project in Map Ta Phut Industrial Estate in Rayong.
The board also on Wednesday approved the addition of new BoI categories with attractive incentives to support the use of new technologies, namely manufacture and repair of high-precision machinery, equipment and parts (8-year corporate income tax exemption), additive manufacturing (5-year exemption) and production of electronics parts using microtechnology (8-year exemption).