The Excise Department is poised to impose a low tax on mild hybrid cars to promote manufacturing of electric vehicles (EVs) in Thailand, says the head of the department.
The move came after the Industry Ministry proposed to the Excise Department that mild hybrids could add value to EVs, said Patchara Anuntasilpa, director-general of the department.
As the price of mild hybrids is not as high as full hybrids, it could prompt the manufacturing of EVs in Thailand, Mr Patchara said. EVs will not be produced here if sales are too low, he said.
Mild hybrids have internal combustion engines equipped with a device that generates electricity stored in a battery with a capacity of 60 volts when driving. Full hybrids have batteries exceeding 60 volts.
There are four car categories under the Excise Department's tax structure, and the levy varies depending on carbon emission. The four are passenger cars powered by gasohol, natural gas vehicles and hybrid cars; pickup passenger vehicles (PPVs) and pickups; eco-cars; and EVs and fuel cell cars.
Hybrid cars manufactured by car makers given tax incentives by the Board of Investment (BoI) are charged excise tax at 4%, but the manufacturers are required to construct plants to produce battery EVs within five years.
If manufacturers do not receive the BoI's tax privilege, EVs produced by them are subject to 8% tax. These hybrid cars, however, must release CO2 of less than 100 grammes per kilometre.
A source in the auto industry said a local manufacturer is lobbying authorities to charge mild hybrid cars, also known as eco-EVs, at a mere 4%, which is on a par with hybrid cars and well below the eco-car tax of 12-14%.
If hybrid car manufacturers fail to build battery EV plants within five years, they are liable for retroactive tax.
Few car makers have applied for the BoI privileges.