Competitive EV pricing targeted
The Industry Ministry is pushing ahead with its ambitious plan to bring prices of electric vehicles (EVs) closer to those of traditional fuel-powered cars by reducing the import duty on auto parts used to assemble EVs in Thailand.
The Office of Industrial Economics has been assigned to conduct a feasibility study of tax reduction options and forward its findings to the National Electric Vehicle Policy Committee, known as the EV board, for consideration this month.
Industry Minister Suriya Jungrungreangkit expects the taxation measure to help increase demand in Thailand for EVs, which are still costly, and at the same time support state measures to curb hazardous PM2.5 dust emitted by old car engines.
"The government believes tax reductions will make EVs inexpensive," Mr Suriya said, adding that the current tax rate stands at 80% of auto part prices.
The study team will consider tax reduction for auto parts and completely built EVs.
Other factors taken into consideration include the state plan to increase the number of EVs in the country and affordable EV prices for buyers, which may range from 700,000 to 800,000 baht, Mr Suriya said.
"We will then know how much tax should be cut to make EV prices equivalent to internal combustion engine cars," he said.
Under the state EV master plan, officials plan to develop the domestic EV industry, making Thailand a major production base in the region. The number of EVs should account for 750,000, or 30% of total car production of 2.5 million units, in 2030.
Officials believe that demand for EVs will continue to increase due to electric car technology becoming a global trend. They also want to promote the EV industry as part of the state's S-curve policy.
Mr Suriya said he has monitored measures to promote EVs and is satisfied with investment incentives for manufacturers.
In 2017, the government kicked off promotional privileges for car and auto part makers covering three types of EVs: hybrid EVs, plug-in hybrid EVs and battery EVs.
The privileges include tax holidays of 5-8 years and import duty exemptions for cars and machinery.
The Board of Investment granted an incentive programme for EV production, with capacity of 125,000 units a year and investment value of 15.6 billion baht.