Thailand recently announced the extension of production deadlines for battery electric vehicles (BEVs) and introduced incentives for hybrid electric vehicles (HEVs) in a bid to revitalize its automotive industry. The move comes at a time when the country’s automobile sector is facing economic challenges and a stagnant domestic market.
Under the current EV incentive package, manufacturers are required to produce one BEV for each vehicle imported. However, starting in 2025, this ratio will increase to 1.5 vehicles per imported unit. To avoid oversupply and potential price wars, any unfulfilled production commitments from the previous package will be transferred to the new incentive terms under the upcoming EV 3.5 package.
The new incentive package will further raise the bar, with manufacturers mandated to produce two vehicles for every imported unit by 2026, and the ratio increasing to three vehicles by 2027. This move aims to support the transition to greener technologies and boost investments in the country.
A total of 26 manufacturers have already applied to participate in the incentive schemes, highlighting the industry’s interest in Thailand’s efforts towards electrification. The Board of Investment (BOI) has also approved a revised excise tax reduction for locally produced HEVs and introduced a new category for mild hybrid electric vehicles (MHEVs).
To qualify for tax benefits, manufacturers must meet specific emissions and safety standards, as well as use key parts produced in Thailand. Additionally, substantial investments in the country are required to benefit from these incentives.
Thailand’s broader push towards supporting the electrification of its automotive sector has attracted investments from Chinese automakers like BYD and Great Wall Motors. The decisions made by the EV Board will now be submitted to the Cabinet for final approval, signaling a significant step towards a greener and more sustainable automotive industry in Thailand.
