China’s Hozon New Energy Automobile Co will start production in Thailand to sell in Southeast Asia, becoming the latest electric vehicle (EV) maker to begin building a supply chain in the region’s top auto-manufacturing hub. 

Hozon signed an agreement with a Thai auto assembly firm earlier this week to produce its NETA V model locally starting next year, Thai government spokeswoman Tipanan Sirichana said in a statement on Saturday. 

The Shanghai-based EV maker, which launched the NETA V model and set up its first showroom in the Thai market last year, also plans to start adding more models to its offerings in the near future, according to Tipanan. 

Competition has been heating up in Thailand, Southeast Asia’s largest market for passenger EVs. The country has a comprehensive supply chain that feeds scores of factories, mainly owned by Japanese companies that produce internal combustion engine cars.

Last year, Thailand became the first country in the region to offer cash subsidies for imported passenger electric cars. The imported battery-powered models are also exempt from most import and excise duties till the end of 2023, though automakers wishing to benefit from the subsidies will have to commit to producing their cars locally beginning 2024. 

Thailand has said it wants 30% of car sales to be electric by 2030, as part of its pledge to achieve carbon neutrality by 2050 and net zero emissions by 2065. 

  - Bloomberg