Thailand’s EV push could yield electric utes

UTES and their rugged SUV derivatives have long been central to the debate over Australia’s transition to an electrified transport fleet but a position taken by the Federal Chamber of Automotive Industries (FCAI) is starting to look misinformed at best and misleading at worst.

Earlier this year, FCAI chief executive Tony Weber stated that because most utes sold in Australia are manufactured in Thailand, it was unlikely this popular — not to mention commercially and culturally important — segment would electrify any time soon.

“Thailand makes most of the Australian market’s one-tonners and they represent a small percentage of the total volume produced,” said Mr Weber.

“Thai-built utes and SUVs are sold domestically and across the region in the millions each year and there is little appetite for change.”

Contrary to Mr Weber’s statement, the Thailand government has set a goal to sell only electric cars domestically from 2035 and to lift electric vehicle production to approximately 700,000 units per annum by the end of the decade, representing 30 per cent of the country’s total car manufacturing volume.

Further, recent developments from Ford Motor Company – which produces its highly successful one-tonne Ranger utility and related Everest SUV in Thailand – show that company is already undertaking to produce electric models in Thailand.

A key takeaway from these developments is that electric, or at least electrified, utes could hit the market sooner than anticipated.

In potentially insulting remarks to a major trade partner that has developed an automotive manufacturing sector more advanced than Australia’s had become before it was disbanded in 2017, Mr Weber claimed that Thailand lacks the technology or resources to build electric vehicles at scale.

“These vehicles come largely from Thailand and the manufacturers there are not in a position to produce electric one-tonne utes, nor will they be in 2035,”he said.

“They simply don’t have the technology to build them nor the resources and capacity”.

Although the FCAI chief told GoAuto that he stands by his statement, Mr Weber’s comments about Thai-built utilities and SUVs appear not only to have dated very quickly but appear to be somewhat misinformed by the S&P Global report commissioned by the FCAI to develop its policies and lobbying efforts on the topic of electrification.

GoAutoNews Premium reported this month that Chinese manufacturer BYD is set to produce more than 150,000 electric vehicles per annum in Thailand from 2024 – a full decade ahead of Mr Weber’s prediction.

The BYD plant is one of 26 electric car projects from 17 companies now approved by Thailand’s Ministry of Finance – which include one-tonne utilities and utility-based SUVs – that are expected to contribute to a total production capacity of 830,000 electric vehicles by the end of this year, and over one million units by 2023.

The interest is also attributed to Thailand wanting to promote electric car adoption in its own market and its government adopting new incentives to support such a change, many of which were implemented in March of this year, several months before Mr Weber’s remarks were printed.

Speaking to News Corp at the Detroit motor show earlier this month, Ford chief financial officer John Lawler said Thailand will become a hub for the manufacturing of zero emissions vehicles, including the possibility of an electrified Ranger.

“Thailand is going to be a hub for manufacturing zero emissions vehicles. As these changes come around the world, we’re going to be parts of that – you’re going to see that coming from Ford,” he said.

“Ranger is a huge opportunity for us and it’s a cornerstone for us … there are great possibilities, and so whether it’s Ranger or it’s other possibilities to bring in and expand, perhaps globally, we will do that.

“Markets are moving at different speeds when it comes to the adoption of EVs, but we also know that being a first mover or near-first mover has been an advantage for us here,” Mr Lawler told news.com.au

Mitsubishi is also working on electrified versions of its Triton and Triton-based Pajero Sport SUV – both of which are produced in Thailand – for sale in the Australian market by 2024.

According to a report published by Japanese outlet Spyder7 recently, the Mitsubishi Triton PHEV is expected to arrive “in late 2023 or early 2024” coinciding with the arrival of the new sixth-generation Triton, which will also form the basis of the next Nissan Navara.

The publication indicates that the model will offer the same petrol-electric driveline as featured across the new Outlander PHEV range.

The next-generation Triton is reportedly being co-developed with Nissan as part of the Renault-Nissan-Mitsubishi Alliance and is understood to be available with diesel and petrol-electric drivelines from launch, again countering Mr Weber’s claims that Thai-built utilities lack forward-thinking green credentials.

Speaking to GoAuto recently, Mitsubishi Motors Australia Limited (MMAL) CEO Shaun Westcott said: “We have a PHEV system that can be easily transformed into a hybrid or EV application and can also go into a truck platform … we are exploring ways of incorporating new technologies into the way we manufacture such vehicles in the future”.

But Mr Weber said he stands by his remarks.

In a discussion with GoAuto, he said the handful of articles submitted as evidence of a shift towards electrification in the Thai-built ute market was an insignificant part of the larger picture and did little to contradict evidence the FCAI has sourced from market intelligence firm S&P Global.

“There’s nothing in those reports that contradicts our research,” declared Mr Weber.

“Now, if things move ahead, and there’s more electrification that goes in (to Thai-built utilities), and that’s supported in a producer’s product that is for Australia – which is classically utes out of Thailand – that would be a great thing.

“What the FCAI wants is a CO2 target. We want to reduce tailpipe emissions as quickly as possible. So, what we did is get S&P Global, who have a global footprint, a relationship with all the OEMs and with all the tier supplies to look at this.

“We’ve got them to do some research and their research is very clear that at this point in time they saw very little electrification in the ute market anywhere in the world, but especially where they make right-hand drive, and that being South Asia, as they describe it.

“There’s always speculation in the press, but there is nothing happening that will move the dial in a 1 to 1.1 million car market like Australia about the rate of electrification in any significant way from (what I have read in) those few articles.”

Mr Weber said the FCAI’s industry led voluntary emissions standard was established in 2020 in the absence of a federally led and mandated emissions target for Australia’s transport sector.

The aim of the FCAI standard is for passenger car and light SUVs to have, on average, a CO2 emissions number under 100 grams per kilometre and for light and heavy commercial vehicles to have a figure of below 145 grams per kilometre by the end of the decade.

For 2021, results showed passenger car and light SUVs averaged 146.5g/km and 212.5g/km for light and heavy commercial vehicles against a target of 150g/km and 193g/km set by the FCAI for that year.

The figures show that the voluntary targets are not being met by light and heavy commercial vehicles, which include most popular dual-cab utility models produced in Thailand for the Australian market.

Mr Weber said it was likely these figures would not decline at the rate tabled under the FCAI’s voluntary emissions paper without stronger action from the federal government.

“The question becomes ‘what is the principle of that you want to achieve?’, and the answer to that is to reduce CO2 from the tailpipe,” said Mr Weber.

“The government needs to say to manufacturers as a whole ‘this is our target, that is your target, go and hit it, and you do that with the best technology mix of vehicles that you can supply to the Australian market’. That’s what you do.

“That’s what our CO2 target is. We’re reviewing that at the moment, so there’s nothing new about that. We now have a government that is more inclined to act on climate change, and we’ve seen that right across the economy. 

“We believe we have set a template that facilitates what the principle is that we want to achieve – and does it in the most efficient and effective way by allowing one, consumers to buy what they want, and two, manufacturers to supply a raft of technologies to get there.”

But there is growing concern that the FCAI’s targets have little to do with environmental protection.

Several national publications have reported recently of growing frustration among FCAI members that not enough is being done to advance electrification technology in the Australian new car market with several going so far as to suggest Toyota is behind a move to “restrain the era of electric cars” locally.

Reporting on the recent Electric Vehicle Summit in Canberra, the Australian Financial Review (AFR) said the FCAI’s proposed government-mandated and voluntary emissions scheme is a “weak” and “toothless” stance which manufacturers including Volkswagen say will do little to improve Australia’s standing as a “dumping ground” for older, less efficient engines and automotive technology.

The AFR reported that FCAI members are “frustrated” that the chamber’s voluntary emissions reduction standard is “restraining the era of electric cars in Australia” and says there is growing disquiet in the FCAI’s ranks over the dominance Toyota has in shaping the chamber’s policy objectives.

As the AFR notes, the FCAI’s memberships levies are partially based on market share, and the Japanese conglomerate in the chamber’s highest paying member, given it currently produces 22.5 per cent of all vehicles sold locally.

Toyota Australia president and CEO Matthew Callachor is the chairman of the FCAI board. He sits alongside deputy chairpersons including Mazda Australia managing director Vinesh Bhindi, Mitsubishi Motors Australia Limited president and CEO Shaun Westcott, and Volkswagen Group Australia managing director Paul Sansom.

Toyota has form internationally in opposing EV mandates both in Europe and the United States, and this year publicly criticised India’s target for 100 per cent electric vehicle sales by 2030.

Toyota has yet to indicate if it will produce an electrified HiLux in Thailand.

The Japanese manufacturer currently builds more than 450,000 examples of the HiLux in Thailand annually, nearly all of which are diesel powered. Thailand builds more than 60 per cent of Toyota’s utilities which are shipped to around 130 countries worldwide, including Australia, where it is the number-one seller.

A recent article published by the Sydney Morning Herald (SMH) details that a wide-ranging and secretive campaign by the FCAI aims to slow a key component of Australia’s national climate change plan.

The report says that a “lobbying and public relations strategy” produced by the FCAI aims to limit any new fuel efficiency standards to a level that “would leave Australia’s car industry with some of the weakest carbon emissions rules in the world”.

The SMH says that the FCAI-developed campaign would allow new passenger cars sold in 2030 to emit “at least 98 grams of CO2 per kilometre”. By comparison, European standards already in place now specify 95 grams of CO2 per kilometre, with a ban on almost all new petrol and diesel vehicles – including hybrids – by 2035.

The FCAI’s public relations campaign, which will continue until next month, comprises targeted briefings, a green paper for government, a “thought leadership show” consisting of roundtables, keynote speeches, newspaper opinion pieces and a “targeted media campaign”, the SMH said.

According to documents obtained by the SMH, the FCAI aims to position itself to “be seen as a thought leader and trusted voice on reducing emissions” with a PR strategy that aims to “initiate” and “shape” the EV discussion.

Beyond the FCAI’s campaign, it seems buying styles of Australians consumers are as much at the heart of the issue. A recent report from the National Transport Commission (NTC) shows that there has been a large shift away from passenger cars and toward SUVs and light commercial utilities.

Sales in the small vehicle segment represented almost 25 per cent of all sales a decade ago but decreased to just 11 per cent in 2021. Sales in the light passenger segment fell from 14 to five per cent over the same period. Conversely, half of all new car sales in 2021 were SUVs, up from a quarter of all sales a decade ago.

The NTC’s report on the carbon dioxide intensity performance of new passenger and light commercial vehicles sold in Australian shows the country is falling behind other countries when it comes to reducing tailpipe emissions.

It shows that of all new passenger cars sold in Australia last year, around 45 per cent had an emissions intensity of 160g/km or less, compared with Europe where almost 90 per cent of cars sold did.

The NTC said transport accounts for 18 per cent of Australia’s CO2 emissions and that the cars we drive are the largest contributor. Australia has one of the developed world’s oldest average fleet ages (10.1 years) and offers fewer choices for cleaner new vehicles than any other Western country.

According to the NTC report, the sale of 4x2 and 4x4 utes increased by more than 43,000 units between 2020 and 2021, and large SUV sales increased by approximately 25,000 units. It says the emissions intensity average of such models exceeds 210g/km and that there is “no option yet in Australia to purchase an electric ute”.

The report states that if Australian consumers had purchased vehicles with best-in-class carbon dioxide emissions in 2021, the national average carbon dioxide emissions intensity from these new car sales would have been reduced by 91 per cent for the passenger car and light SUV category and 47 per cent for the light and heavy commercial vehicle category.