The future of transportation in Thailand and potential for mobility transformation
By Panun Prachuabmoh, Country Chairman, the Shell Company of Thailand Limited
For centuries, Thailand has played a pivotal role in Asia as a hub for transport and connectivity, both internally through the development of urban and rural networks, and externally by linking neighbouring countries. It is therefore not surprising that considerations concerning mobility should play such a prominent role in debates on the shape and pace of social and economic development in the country.
While the spread of the coronavirus has had a major and as yet unquantified impact on mobility trends across Asia, there is much to be optimistic about when considering the future of transportation and mobility in Thailand.
The country’s commitment to new infrastructure projects and its growing vehicle manufacturing industry offer the potential to create a major transformation in mobility. Thailand’s determination to break through the middle-income trap – which has impacted investment, growth and industrial diversification – is likely to bring rapid development locally.
However, the extent of these improvements, and the effectiveness of the mobility ecosystem created for the future, will rely on continued close collaboration between consumers, governmental policymakers and industry for the provision of infrastructure, fuel improvements and research and development.
A good example of the government’s commitment to mobility improvements is Thailand’s Eastern Economic Corridor project – the planned development of three eastern provinces on the Gulf of Thailand, Chonburi, Rayong, and Chachoengsao into a leading ASEAN economic zone and hub for technological manufacturing and services. This project will see the development of strong regional land, sea and air transportation links.
In line with customer and governmental concerns about air pollution due to congestion in urban areas, the Electric Vehicle Association of Thailand recorded an increase of 81% in the number of companies operating in Thailand’s electric vehicle ecosystem from 2015 to 2019. Substantial support in the form of tax and non-tax incentives are available to manufacturers who produce battery electric vehicles in Thailand during 2020 to 2022.
Furthermore, Thailand’s export-driven economy provides significant opportunities for the electrification of rural commercial freight transport and enhancing rural transport networks with smart infrastructure to create a more environmentally-conscious supply chain and socially-sustainable export sector.
Thailand’s transport network is expected to improve if it can achieve its vision of becoming a regional logistics hub. Public investment in infrastructure has become a policy priority, with 70% of the $75 billion infrastructure development plan for 2015-2022 devoted to transport. Emphasis is placed on expanding and upgrading its railways and reducing over-dependence on the road network which currently handles 85% of total freight volume and is the primary means of passenger transport.
Traditionally reliant on two-wheeled transport, growing mobility options now include high-speed trains, a growth in private car ownership, ride-hailing services, a growing mass transport system and plans for a third international airport in Bangkok.
Thailand’s mobility customers also benefit from widespread digitalisation. As an example, Shell has linked up with car-sharing company Haupcar to provide parking spaces in our retail stations, offering oil change, refuelling and cleaning services and possibly adding electric charging services in the future.
In 2014, the “One Transport for All” mass-transit vision was introduced. The initiative includes more interconnected land and water mass transportation routes that link cities together. Commuters can travel via the electric Intercity Rail and public buses with ease. A few local companies have been investing in electric cars and ferries to reduce pollution and fossil fuel use, and some have been testing autonomous vehicles to connect homes to nearby transit stations.
By 2030, Thailand aims to produce at least 750,000 electric vehicles annually, which is around 30% of its total automobile manufacturing capacity. Furthermore, the government has announced a roadmap to make the country an EV hub within the ASEAN economic group by 2025 and is working on proposals to increase the number of EV charging stations in the country.
However, while e-mobility should expect relatively quick adoption in the business to consumer passenger sector through an increase in electric cars, the uptake in business-to-business fleet services is likely to be slower. This is partially due to the size of batteries required to power heavily laden trucks over long distances. The government’s ambitious 20-year development strategy, Thailand 4.0, however, signals an intent to deliver change quickly.
There are expected to be 53,000 electric motorcycle taxis by 2022 and 5,000 electric buses within five years. To achieve the goal, governmental organisations and state enterprises have adopted electric vehicle use and introduced electric buses as well as electric motorcycle taxis.
Other key areas for the development of mobility in Thailand include increasing regulation of biofuels content for both gasoline (E20) and diesel (B10, B20) fuels , growing demand for premium fuels with lower emissions to combat worsening air quality, creating alternatives to battery-operated electric vehicles such as bio-ethanol fuel cells and the development of a government-led carbon pricing system.
Thailand is already a major producer of biofuel and the agricultural sector offers real potential for greater production of ethanol, to anchor production of biofuels. However, it is also important for Thailand to support alternative energy sources such as electricity and hydrogen.
Since late 2019, the Energy Ministry has been pushing for the country to be a global free-trade hub for Liquefied Natural Gas, eyeing an increase in regional gas-to-power adoption. It will be important for Thailand to support alternative energy sources such as renewable electricity and evaluate the potential for developing a hydrogen economy.
A more extensive consideration of the mobility opportunities and challenges facing Thailand and Asia as a whole can be found in Shell’s recently launched report ‘Cities On The Move: Driving Asia’s Mobility Revolution’.
The report, Shell’s first ever review of mobility in Asia, draws on extensive research and interviews, providing insights into key mobility trends across Thailand, the Philippines, Singapore, India and China countries and furthering the debate on the region’s mobility requirements. It explores how successful partnerships between governments, industry and society can lead to mobility developments, providing valuable services to people and helping to meet their demands.
What is clear is that there is not one solution to Thailand’s mobility challenges. As the drive towards lower carbon and sustainable mobility intensifies, the country needs mobility developments, fuels ecosystems and regulations to meet specific demands. Common to them all, though, is the importance of collaboration between governments, industry and consumers to anticipate new trends and meet evolving needs. No single player can achieve a successful system alone.
The question is, are we ready for change?