Mercedes-Benz is set to begin production of its all-electric EQS luxury sedan in Thailand by the end of 2022, making the Southeast Asian country not only the first in the region, but also one of only seven locations in the world to produce the vehicle.
This marks a significant milestone in Thailand’s journey from being a conventional hub for automaking to becoming a regional leader in electric vehicle production, according to an article by the country’s Board of Investment (BOI).
“This shows how important Thailand is to us. The EQS is the absolute highlight of our full battery vehicles – the topmost as far as technology is concerned. In Thailand, we have partners we know can deliver,” said Roland Folger, President & CEO of Mercedes-Benz’s Thai business, in an article published by the BOI.
Reports point to the high level of competitiveness and skilled workforce in the country as some of the main reasons why Mercedes chose Thailand as one of its EQS production sites.
Highly favorable government policies that comprehensively incentivize both investors in the EV sector’s supply chain and car buyers were also cited by Mercedes-Benz as key factors.
At present, the BOI offers 3-11 years of tax holidays for EV production of all types, including BEV platforms. Furthermore, carmakers can rely on investment incentives for EV-related infrastructure, especially charging stations, to accelerate the growth of the domestic market for EVs.
BOI data shows that as a result of these policies, investment pledges in the automotive and parts sector quadrupled to $1.2 billion in the first quarter of 2022 from a year earlier.
Other international auto giants including Toyota, Great Wall Motors and SAIC Motor of China have also signed up for a government incentive plan to promote EV sales and production in the country. Under this scheme, the government provides subsidies of between $2,000 and $4,400 per car, depending on the vehicle’s model and battery capacity.