Tesla has reportedly paused its plans to build a factory in Thailand and will instead focus on establishing charging stations.
The story was first broken by the outlet The Nation citing a Thai government source. Additionally, Tesla will not be setting up factories in Malaysia or Indonesia, relying solely on its existing plants in the US, China, and Germany to meet market demand.
Leaving the door open for Malaysia
Since the news broke, officials from Malaysia and Thailand have responded. Malaysia's Minister of Investment, Trade, and Industry, Tengku Zafrul Aziz, clarified that Tesla never committed to establishing a factory in Malaysia.
He also emphasized that the information came from an unnamed source. The Malaysian government has not received any official communication from Tesla.
Zafrul further stated that whether or not Tesla builds a factory in Malaysia will not impact the country's electric vehicle (EV) development. However, a CNBC report from 2023 noted that the Malaysian government had allowed Tesla to bypass existing regulations and enter the market without needing a local joint venture, to attract the company.
Malaysian Prime Minister Anwar Ibrahim commented that Tesla's decision is unrelated to Malaysia's performance or policies, attributing it instead to the fierce competition from Chinese EV manufacturers. Anwar added that while Tesla has invested more in Thailand, operations in Malaysia are still in their early stages. Malaysian officials are set to meet with Tesla representatives on August 22, expecting more clarity on the matter then.
Thailand's ambition as an EV manufacturing hub
In Thailand, Bangkok Post reported that government spokesperson Chai Wacharonke stated Tesla is re-evaluating its global investment plans, not just considering Thailand. However, the Thai government is still awaiting an official response from Tesla regarding the factory delay.
Then Thai Prime Minister Srettha Thavisin (Thavisin has been removed from office by the Constitutional Court on August 14 at the time of writing) had met with Tesla executives multiple times in the latter half of 2023, visited Tesla's California factory, and led Tesla representatives on a tour of industrial parks in Thailand. Srettha later announced that Tesla would turn Thailand into an EV manufacturing hub.
Following news of the factory suspension, Srettha stated that he had not received any official communication from Tesla, and discussions between the Thai government and Tesla were ongoing.
Srettha also mentioned that during initial talks, Tesla expressed interest in India's vast market but viewed Thailand as a more favorable location for a factory. However, after Elon Musk canceled plans for a factory in India, no further updates were provided, sparking criticism in India.
Meanwhile, Indonesia is still awaiting progress on Tesla's battery plant project. In 2022, the two parties signed a cooperation agreement, under which Tesla committed to purchasing US$5 billion worth of nickel from Indonesia for use in EV batteries.
