The government of Thailand has recently approved a new set of incentives targeting the electric vehicles (EVs) sector, including lower excise tax and import duties on auto parts.
The incentives aim to promote domestic manufacture of EVs between 2022 and 2025. A subsidy worth THB 70,000 (USD 2,100) is available per unit for passenger cars with a battery of 10 to 30 kilowatt-hours (kWh), while a THB 150,000 (USD 4,500) subsidy is available per car with a battery of more than 30kWh for completely knocked-down (CKD) and completely built-up (CBU) units. CKD pickups with a battery size of more than 30 kWh can also receive a THB 150,000 subsidy per unit. EV motorcycles priced up to THB 150,000 can receive a subsidy for both CKD and CBU models.
The package includes a customs duty reduction of up to 40% for battery electric vehicles (BEVs) with a retail price of up to THB 2 million (USD 60,000). A further discount on customs duty of 20% is available for BEVs with batteries exceeding 30kWh and a retail price of THB 2 million to THB 7 million (USD 21,000). The government also reduced the excise tax from 8% to 2% for BEVs.
Thailand approved THB 3 billion (USD 90 million) from the 2022 budget to fund these subsidy programs. It also agreed to provide THB 40 billion (USD 1.2 billion) from 2023 to 2025 to promote EV consumption. From 2022-24, the incentives will broader and faster adoption of EVs by offering tax breaks and subsidies for imported and locally produced cars and motorcycles. For 2024-25, the focus will be on promoting domestically manufactured EVs while removing some benefits for imported vehicles.
Thailand initially set a target for EVs to make up 30% of its total car manufacturing by 2030, around 750,000 of 2.5 million units. The authorities increased the target to 50% in 2021. The country also set out a 10-year plan for the auto sector to transition from fossil fuel-powered vehicles to EVs, starting from 2022.
(Sources: Bangkok Post; Reuters)