Bangkok: While the escalating tensions between the United States, Israel, and Iran are under global scrutiny, many may not have anticipated the repercussions that would affect China's automotive industry. However, from the perspective of Assoc. Prof. Dr. Sompop Manarangsarn, this conflict has become a major windfall for the Chinese EV industry, transforming sluggish sales into a new opportunity in the global market. Prior to the invasion of Iran in late February, China's new energy vehicle (NEV) industry was facing a slowdown, with domestic sales stagnating and falling by over 27% in the first two months of 2024. Even giants like BYD, which had just defeated Tesla the previous year, were affected, with net profits declining by 19% in 2023, the lowest level since 2021, due to fierce pricing competition within China itself.
According to Thai News Agency, as the war escalated and global oil prices soared, the market dynamics shifted dramatically. Chinese EVs, previously sluggish domestically, saw a shocking surge in exports. In the first two months of this year, China's NEV exports grew by 110%, with Chery seeing a 45% increase and Geely soaring by 150%.
A key reason for the immense popularity of Chinese EVs during wartime, according to Assoc. Prof. Dr. Sompop, is their cost-effectiveness. When crude oil prices soared to $100 per barrel, the cost of using internal combustion engine vehicles became 4-5 times higher than that of EVs, and in some cases, even 10 times higher. Comparative data shows that for 100 kilometers, an EV costs only about 60 baht, while a gasoline car costs 230 baht or more. Furthermore, Chinese EVs have a relatively low average price, averaging around US$16,000 (approximately 500,000 baht), making them a highly attractive option in times of economic hardship and high fuel prices.
Regarding Thailand, Assoc. Prof. Dr. Sompop pointed out that we have a very high level of awareness about EVs. Last year, 120,000 EVs were sold, representing 20% of total car sales, and this number is expected to increase further due to supporting government policies such as the trade-in program for old cars. However, a key problem that Thailand needs to urgently address is the charging infrastructure. While China has 21 million charging stations, Thailand still faces long queues during peak seasons. Therefore, the Thai government needs to invest heavily in developing infrastructure and promoting the use of renewable energy, such as installing solar panels in residential areas, in order to create a complete clean energy ecosystem.
Regarding the conflict situation, Assoc. Prof. Dr. Sompop believes that using Pakistan as a mediator in negotiations between the United States and Iran is a suitable option, given Pakistan's good relations with all parties, including China, the United States, Saudi Arabia, and Iran. Although the negotiations might take a long time, like a boxing match, as long as there is no violent conflict that destroys infrastructure, it is still a positive sign for the global economy.
Furthermore, the US-Iran conflict would not only shift the political balance of power but also accelerate the world's shift towards clean energy. And it appears that China's EV industry is best prepared to seize the opportunities presented by this crisis.