The national committee in charge of promoting the electric-vehicle (EV) industry has approved a new car tax structure to support the production of hybrid vehicles as part of a plan to convert internal combustion engines to electric power.
Narit Therdsteerasukdi, secretary-general of the Board of Investment, said the National Electric Vehicle Policy Committee (EV Board) chaired by Prime Minister Paetongtarn Shinawatra yesterday approved an adjustment of the auto tax structure for hybrid electric vehicles (HEV) and mild hybrid electric vehicles (MHEV) with no more than 10 seats.
"The move is aimed at positioning Thailand as a hub for EV and electric motorcycle production in Southeast Asia," he said.
Excise taxes will be lowered for HEV makers that make an additional investment of at least three billion baht from 2024 to 2027 and use local parts, Mr Narit said. Vehicles will also need to have advanced driver-assistance systems to qualify, he said.
The manufacturers will also need to comply with strict carbon dioxide (CO2) emission requirements, he said.
Vehicles emitting less than 100g of CO2 per kilometre will have an excise tax rate of 6% from 2026-2032. For those emitting CO2 between 101-120g/km, the rate will be 9% from 2026 -2032, he said. Under the old tax structure, excise taxes would increase 2% every year after 2026, Mr Narit added.
For MHEV, vehicles emitting less than 100g of CO2 per kilometre will have an excise tax rate of 10% from 2026-2032. For those emitting CO2 between 101-120g/km, the rate will be 12% from 2026-2032, he said.
The MHEV manufacturers will have to make an additional investment of at least one billion baht in 2026 and at least five billion baht in 2028 and also have to use local parts like the HEV, Mr Narit said.
The EV Board also agreed to extend the production period of battery electric vehicles (BEV) under the so-called EV3 measure, which aims to propel EV industry growth. The measure comprises subsidies, reduced import duties for fully assembled cars and an excise tax cut.
Under the current measure, importers of BEV who receive the privileges must produce vehicles at a proportion of one imported vehicle per one manufactured by 2024. If they fail to do so by the deadline, the proportion will be 1:1.5 in 2025.
However, between 2022 and 2023, about 84,000 EVs were imported under the EV3 measure, which means 124,000 vehicles must be produced in 2025.
But due to the current declining car sales, the EV Board decided to extend the production period to help the manufacturers, Mr Narit said.
Manufacturers are also allowed to produce vehicles at a proportion of 1:2 in 2026 and 1:3 in 2027 under the new package known as the EV3.5, which covers 2024 to 2027, but has fewer incentives than the previous model, he said.
Some EV makers previously raised concerns that EVs produced locally under EV3.0 may have higher prices than EVs imported under EV3.5, putting them at a competitive disadvantage.