Financial subsidies for electric vehicles (EVs) are not necessary for Thai buyers and the government is confident an excise tax discount is enough to stimulate EV purchases here, says Industry Minister Uttama Savanayana.
"Each country decides on its own subsidies for EVs, but an excise tax discount is sufficient for the local car market now," he said.
Many developed countries have offered both financial and non-financial subsidies such as tax rebates, tax exemptions, permission to drive in bus lanes and free parking to attract motorists to make the EV shift.
Mr Uttama said EV technology has yet to be perfected and will develop over the next several years.
The government has ramped up its automotive policy to produce EVs in recent years, with related investment privileges for carmakers being issued in March, including tax holidays of 5-8 years.
The privileges focus on production of hybrid EVs, plug-in hybrid EVs and battery EVs.
The promotions include passenger cars, pickups and buses with different rates of privileges based on production technology.
The government added 10 more important EV parts that will enjoy corporate income tax exemption for eight years.
Last June, the government announced new excise tax incentives for hybrid EVs and plug-in hybrid EVs under the Board of Investment (BoI)'s promotion scheme, with the levy being cut from 25% to 5% based on CO2 emissions. BEVs will be taxed 2%, a sharp drop from 10%.
Hybrid EV pickup passenger vehicles and double-cab pickups that release less than 175 grammes of CO2 per kilometre will be taxed at 23% and 10%, down from 25% and 12%, respectively.
But this tax privilege is solely intended to promote EV production locally and will expire in late 2025.
With all the privileges and incentives, applications for the hybrid EV project have been submitted by Toyota, Honda, Nissan, Mazda and Suzuki, but only Toyota has been granted BoI incentives.
For PHEVs and BEVs, German carmakers Mercedes-Benz and BMW plan to join the EV scheme.
Mr Uttama said the BoI is considering all EV applications and some projects will soon be proposed at its board meeting, chaired by Prime Minister Prayut Chan-o-cha.