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Source: Global Times

[Global Times reporter Ding Yazhi] "Tesla CEO Musk seems to be cold towards ASEAN." Hong Kong's South China Morning Post reported on the 9th that after Thailand and Malaysia had "pursued" the US electric car manufacturer for months, the company's hopes of investing billions of dollars in the Southeast Asian "super factory" have faded. Thailand's The Nation recently quoted an anonymous government source as saying that Tesla has given up building a factory in Thailand and will focus on charging infrastructure in the future. At the same time, Malaysia, which has been seeking Tesla's investment, has also been poured cold water.

A Tesla Supercharger station in a shopping mall parking lot in Kuala Lumpur, Malaysia (Visual China)

“I had high hopes”

Currently, Tesla has four vehicle factories in the world, located in Shanghai, China, Berlin, Germany, Austin, Texas, and Fremont, California. In August 2022, Musk announced that he hopes to set up 10 to 12 "super factories" around the world. Malaysia, Thailand and Indonesia are all actively trying to attract Tesla to settle there.

"Southeast Asia had high hopes for Tesla to build a 'super factory' there, as the multi-billion dollar investment would greatly boost the development of local manufacturing and electric vehicles." The South China Morning Post reported that before Tesla's strategic shift, Thai Prime Minister Setia and Malaysian Prime Minister Anwar had both held talks with Musk. Musk expressed interest in the Malaysian market last year and was interested in bringing Tesla and other companies to the country. In order to attract Tesla, Malaysia abandoned its long-standing joint venture policy and allowed Tesla to enter the market independently.

Just after the news that "Tesla decided to stop building a factory in Southeast Asia" was reported, Malaysia's Minister of Investment, Trade and Industry Tengku Zafrul posted on social media that "although we have discussed with Musk, Tesla has not promised to open a factory."

On the other hand, Thailand has also been trying to attract Tesla in the past period of time. In December last year, Thai Prime Minister Setia personally took Tesla executives to visit three industrial zones in Thailand and expressed his belief that Tesla would invest in Thailand's entire electric vehicle supply chain, thereby creating a large number of jobs.

According to a CNN report in March, the Thai Prime Minister's Office revealed that Tesla is in talks with the Thai government to establish a production facility in the country. The Secretary General of the Thai Prime Minister said that the government has offered Tesla a 100% green facility, adding: "We are in talks with them."

Different demands

According to a report by Singapore's Straits Times in March, Tesla's senior public policy and business development director posted on social media that Southeast Asia will become a major growth area for electric vehicles in the coming years and will provide a large customer base as demand in the United States slows. Consulting firm EY predicts that by 2035, the Southeast Asian auto market could be worth as much as $100 billion.

Tesla values ​​the Southeast Asian market, and Malaysia is also eager to develop electric vehicles in the country. In 2023, the Malaysian government granted Tesla a license to sell cars in the country and said the company would build a charging station network in Malaysia. Singapore's Lianhe Zaobao quoted Malaysian Prime Minister Anwar as saying that Tesla's operations in Thailand are large, while Malaysia's electric vehicle industry is just getting started.

Therefore, in comparison, attracting Tesla is Thailand's effort to become the electric vehicle manufacturing center in Southeast Asia. Earlier, Saita wrote on social media: "I hope that this cooperation (Tesla and Thailand) will consolidate Thailand's position as an electric vehicle and renewable energy center in the coming years."

In order to achieve sales of 225,000 electric vehicles in Thailand by 2025, 725,000 by 2030, and ultimately achieve the goal of 100% electrification by 2035, the Thai government has implemented electric vehicle subsidy plans and tax incentives. Currently, Thailand has reduced the consumption tax rate on pure electric vehicles from 8% to 2%, and provides subsidies ranging from 70,000 to 150,000 baht (approximately 14,000 to 30,000 yuan) depending on the type and model, while also reducing road taxes and import tariffs on electric vehicles.

'This is a business decision'

Tesla has not yet given a specific reason for its decision to stop building factories in Southeast Asia. But according to the Straits Times on the 10th, Malaysia's Minister of Communications and Digital Fahmi Fadzil said, "This is not the government's fault. This is a business decision because Tesla has found that in a fiercely competitive environment, Chinese companies have different (business) models and can produce more cost-effective products."

According to data released by Thailand's "AUTO LIFE" website, electric vehicle sales in Thailand reached 26,000 units from January to April this year, a sharp increase of 41.8% compared with the same period last year, of which Chinese brands accounted for as much as 89%. More than a dozen manufacturers from China, Japan and Europe have already produced electric vehicles in Thailand, and some plan to produce them in the next two years. Meanwhile, in Malaysia, Tesla briefly led in sales last year, but was later surpassed by BYD.

Li Fengjin, a senior researcher at the Yusof Ishak Institute of Southeast Asian Studies in Singapore, analyzed to the South China Morning Post that although the electric vehicle market in Southeast Asia has potential, it has been dominated by several Chinese manufacturers. At the same time, Chinese electric vehicles are cheaper than Tesla, making them more attractive to Southeast Asian consumers with lower budgets.

Sun Xiaohong, secretary general of the Automobile Internationalization Committee of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said in an interview with the Global Times that the investment and expansion of Chinese electric vehicle companies in the Southeast Asian market is the result of actively responding to local market demand and policy guidance, and the completeness of the industrial chain and the diversity of models provide Chinese automakers with strong competitiveness. As a world-renowned electric vehicle manufacturer, Tesla has a certain influence in the global market, but it seems to be a step behind Chinese automakers in the layout of the Southeast Asian market. In addition, Tesla has recently shown a shrinking trend in the international market, and its sales and profits in the US market are also facing certain challenges, which may have affected its layout in other global markets.