The government is looking towards non-tariff barrier measures, particularly battery standards, to prevent an anticipated flood of electric vehicle (EV) imports from China in light of the Asean-China free trade agreement.
Industry Minister Uttama Savanayana said the government expects to conclude the measures within a month.
Related agencies including the Customs Department, Department of Trade Negotiations, Department of International Trade Promotion, Board of Investment (BoI), Thai Industrial Standard Institute, and Office of Industrial Economics are now working on measures to protect the domestic industry.
Navin Damrikan, deputy secretary-general to Prime Minister Prayut Chan-o-cha for political affairs, said the government may introduce the battery standards to avoid a deluge of imported EVs from China.
He said China has also introduced non-tariff barriers, requiring imported EVs to use batteries guaranteed by the Chinese government.
"The Thai government has already announced and approved promotional privileges for production of three types of electric cars: hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs)," said Gen Navin.
"Related agencies are now developing infrastructure such as charging stations and issuing quality standards for electric parts."
The BoI in March this year approved promotional privileges for EVs, including tax holidays of 5-8 years. The privileges will focus on production of HEVs, PHEVs and BEVs.
The promotions will include passenger cars, pickups and buses, with different rates of privileges based on production technology.
The board also agreed yesterday to add 10 more important EV parts to the list enjoying corporate income tax exemption for eight years. They include batteries, traction motors, battery management services, DC/DC converters, inverters, portable EV chargers, electrical circuit breakers and EV smart-charging systems.
Investment in those items will garner additional privileges and a 50% cut on corporate income tax for another five years if the manufacturers establish their factories in the Eastern Economic Corridor and submit their applications by Dec 29, 2017.
Gen Navin said the speed of establishing manufacturing factories for EV in Thailand relies primarily on global demand, citing the BoI projection that the sales volume of EVs is estimated to comprise 5% of total vehicle sales in 2023, 10% in 2026 and 35% in 2040.
There are about 2 million units of EVs and hybrid cars worldwide now.
In a related development, a BoI report, which was based on consultation with car makers such as Nissan and BMW, found the board's measures are still not attractive enough to lure investment.
Local manufacturers also need time to test Thai market demand for imported completely built unit EVs, at least 2-3 years, said the report.
Interested HEV manufacturers are required to submit applications by Dec 31, 2017, while applications for the production of PHEVs and BEVs have a deadline of Dec 31, 2018.
Toyota has already won BoI privileges to manufacture HEVs.
The board said major car manufacturers such as Toyota, Honda and Isuzu do not have any plans yet to invest or sell BEVs in the domestic market.