Incentives to spur EV sales

Incentives to spur EV sales

EVs to reach 4% of all new vehicles sold in Thailand in 2023. By Fitch Solutions

Thailand will remain the largest electric vehicle market in Southeast Asia going forward as prospects of consumer-focused incentives will supplement existing incentives for automakers to produce EVs locally.

The share of plug-in hybrids in relation to battery electric vehicles will gradually lose ground over the next decade as public charging infrastructure improves, local automakers ramp up production of EVs and consumer-focused incentives raise demand.

Thailand has increased its attractiveness through incentives as an EV production base, which will in turn offer the market lower import duties and more affordable locally produced EVs.

A reduction in excise duties for locally made EVs plus the absence of high import duties means lower prices for consumers. Manufacturers can now obtain a reduction of up to 40% of import duties for battery electric vehicles (BEVs) with a value of less than 2 million baht. A further reduction of 20% on import duties for BEVs priced between 2 million and 7 million baht has been introduced.

A further breakthrough came in February when the national EV policy committee agreed in principle to reduce the excise tax on EV batteries from 8% to 1%, while providing a 24-billion-baht subsidy programme for the EV battery industry. A factory producing an EV battery with a capacity less than 8GWh will receive a subsidy ranging from 400 to 600 baht per kWh. Batteries with a capacity greater than 8GWh will be eligible for subsidies ranging from 600 to 800 baht per kWh.

For vehicle buyers, the government has introduced subsidies ranging between 70,000 and 150,000 baht depending on battery capacity. Purchasers of e-motorcycles will be eligible for an 18,000-baht subsidy for vehicles priced up to 150,000 baht.

Given these incentives, we forecast total EV sales to rise by 20.7% this year and reach 38,800 units, led by BEV sales which are set to rise by 38.9% to 29,100 units. Over our 2023-32 forecast period, total EV sales will reach just over 48,382 units, representing roughly 4.8% of total vehicle sales.

In 2019, the government cut import duties on EVs imported from mainland China under a trade agreement, which has been a success, with EV sales surpassing the critical 1,000-unit mark as result. According to data from the Department of Land Transport, BEV sales jumped 370% to 1,572 units in 2019.


The Chinese automaker BYD has officially launched operations in Thailand. With its local partner, Rever Automotive, it will invest over 3 billion baht to purchase additional vehicles from China and carry out a marketing plan locally.

EV Primus, the local importer of Dongfeng Sokon Automobile (DFSK) vehicles, has also announced plans for local assembly. The company, which recently unveiled the Volt City EV, intends to begin producing EVs in Thailand in September this year. EV Primus is investing 400 million baht to build an EV factory at Gateway City Industrial Estate in Chachoengsao.

According to registration records, the BYD ATTO 3 was the best-selling pure EV in January, with 1,040 vehicles delivered. BYD's local sales leadership is due to large-scale exports of its ATTO 3, with over 10,000 shipped so far.

Meanwhile, Volvo Cars (Thailand) is reportedly considering selling only EVs locally amid a rapid surge in EV adoption, aided by the introduction of incentives and rising purchasing power.

In the commercial segment, Isuzu is waiting for the right time to launch electric pickups and trucks in Thailand, where the market is currently dominated by passenger EVs. In Thailand, Isuzu focuses on commercial vehicles, particularly pickups and mid-sized to large trucks. Before the company plans to introduce electric versions of these vehicles in the country, it must ensure that charging stations are widely available.

In Bangkok, 1,250 electric buses are set to replace old diesel buses. The number of electric buses in the Bangkok metropolitan area will be increased to 8,000 within three years. Bus routes in the capital are increasingly being electrified, most recently route 515, which is operated by Thai Smile Bus (TSB) and several other electric routes in the capital.

TSB recently expanded its business by acquiring 21 bus and boat operators, resulting in the TSB network now operating on 120 bus routes and three water routes.

Improvements are being seen on the charging front as well. PTT Oil and Retail Business (OR) earlier announced plans to increase the number of EV charging stations from 107 to 450 by the end of 2022. By 2030, it hopes to have 7,000 locations.

ThaiBev, meanwhile, is diversifying beyond its core beverage market into the field of EV charging stations. The company last year began trials with two charging stations at KFC locations, which it operates. If the trial is successful, ThaiBev intends to begin full-scale deployment in 2023 at existing stores as well as larger commercial centres.

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