China will establish a China Automotive Technology and Research Center (CATARC) in regional automaking hub Thailand, the Thai government said on Friday, the centre’s fourth such facility in the world.

Thai government tax incentives and subsidies have already drawn Chinese carmakers, including BYD and Great Wall Motor, which have committed to investing US$1.44 billion in new production facilities in the country.

CATARC, a Chinese government affiliated auto research institute, has centres in Germany, Switzerland and Japan and the latest one will facilitate Chinese electric vehicle (EV) manufacturers in Thailand, government spokesperson Chai Wacharonke said in a statement.

Thailand is Southeast Asia’s largest car producer and exporter in the region, with Japanese manufacturers including Toyota Motor Corp and Isuzu Motors dominating the domestic sector for decades.

Thailand aims to convert about a third of its annual production of 2.5 million vehicles into EVs by 2030 and is preparing incentives to encourage more investment and conversion into EV manufacturing.

Government subsidies, which are currently up to 150,000 baht ($4,265) per car, have allowed EVs to gain more traction in Thailand, which accounted for about half of all EV sales in Southeast Asia in the second quarter.

Prime Minister and Finance Minister Srettha Thavisin said he has shown Tesla executives industrial estate for potential investment last week.

Visitors check out a new car model at the Fast Auto Show Thailand & EV Expo 2023. (Photo: Wichan Charoenkiatpakul)