Thailand’s Board of Investment said on Wednesday that Hyundai is investing 1 billion baht ($28.3 million) to set up a facility to assemble electric vehicles and batteries. The new plant will be located just southeast of Bangkok and is expected to start production in 2026. 

The Thai government is trying to pivot its car industry towards making electric vehicles and has offered tax incentives to try to lure EV manufacturers. Chinese EV makers like BYD and Great Wall Motor have started facilities in the Southeast Asian country.

The Hyundai project is part of a plan known as EV 3.5 package that aims to promote investments in Thai-based manufacturing across the entire EV ecosystem, according to the Board of Investment. 

The Thai investment is not Hyundai’s first foray into Southeast Asia’s EV space. The Korean carmaker opened an innovation center, which also serves as an assembly facility for the Ioniq 5 and 6, in Singapore last November. 

Thailand’s EV landscape

Japanese brands have traditionally dominated Thailand’s consumer market. Some carmakers like Toyota and Nissan have had assembly plants in the Southeast Asian country as early as the 1960s. 

But in recent years, Chinese EV brands have risen in popularity, thanks to Thai government subsidies for consumers buying EVs.

EV sales surged in Southeast Asia in the first quarter of the year, according to data from the market research firm Counterpoint Research. Sales of battery electric vehicles grew 104% year-on-year, with Thailand accounting for 55% of all BEV sales. 

BYD led the surge in regional sales, with 47% of market share.

Thailand is BYD’s largest overseas market. The Chinese EV giant officially opened its Thailand factory—its first in Southeast Asia—last month.