Budget sought to maintain state EV subsidy

Budget sought to maintain state EV subsidy

Current funds set to run out next month

People examine electric vehicles at a recent EV Expo. (Photo: Wichan Charoenkiatpakul)
People examine electric vehicles at a recent EV Expo. (Photo: Wichan Charoenkiatpakul)

The Excise Department says the 2.9-billion-baht subsidy to support the use of electric vehicles (EVs) will run out within September and it plans to request an additional budget from the new administration to continue the programme until 2025, says director-general Ekniti Nitithanprapas.

He said the measure to support the use of EVs runs from 2022 to 2025, with an EV battery subsidy from the government for EV buyers.

EVs with a battery capacity of less than 30 kilowatt-hours (kWh) receive a subsidy of 70,000 baht per unit. Those with a battery capacity of 30kWh or greater receive a subsidy of 150,000 baht per unit.

The subsidy is expected to run out by September because of high demand for EVs.

Since the subsidy started, 20,000 EVs have registered with the Department of Land Transport, a growth rate of 270% compared with before the measures were adopted, which is the highest rate among Asean countries.

Mr Ekniti said the new budget request to continue the EV subsidy would be a minimum of 2.9 billion baht, depending on the growth rate of EV usage in the country.

The subsidy limit would remain a maximum of 150,000 baht per unit, though this depends on the discretion of the next government and the size of the budget, he said.

EV subsidies are provided through various car manufacturers with a memorandum of understanding, and must be used to reduce the price of EVs for buyers.

Eleven EV manufacturers are participating in the subsidy scheme.

Mr Ekniti said apart from direct subsidies to EV buyers, the government also announced a reduction in import duties and excise tax for EVs.

However, from 2024, participating EV makers have to set up a production base in Thailand and begin domestic EV production to offset their imports at a ratio of 1:1, meaning for every imported EV that receives a government subsidy, one unit must be produced locally.

If an EV manufacturer is unable to begin domestic production in 2024, the ratio changes to 1.5 locally produced vehicles for every imported EV that receives a subsidy.

On Feb 15, 2022, the cabinet approved measures to support the use of battery EVs in Thailand, including passenger cars, electric pickups and electric motorcycles.

The measures include a significant reduction in terms of import duty and excise tax, as well as the subsidy.

The incentive package includes a 40% reduction in import duty for EVs priced up to 2 million baht, a 20% reduction for those priced between 2 million and 7 million baht, and an excise tax cut from 8% to 2% for imported EVs.

EVs priced up to 2 million baht receive a subsidy of 150,000 per unit for passenger cars with a battery capacity of 30kWh or greater, while units with a battery capacity of less than 30kWh receive a subsidy of 70,000 baht per unit.

EVs priced more than 2 million baht do not receive a subsidy.

For electric pickups, the excise tax is reduced to 1%, plus a subsidy of 150,000 baht for a battery capacity of 30kWh or greater.

For electric motorcycles priced up to 150,000 baht, the excise tax is eliminated, while a subsidy of 18,000 baht is available for units both imported and domestically produced.

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