Thai EV Board: New Hybrid Tax Structure, BEV Timeline Extended

Thailand’s National Electric Vehicle Policy Committee (EV Board) has extended the production timeline for battery electric vehicles (BEVs) under the EV3 measure, designed to boost the EV industry. This measure offers subsidies, reduced import duties, and excise tax cuts.

Under the original plan, BEV importers benefiting from these privileges were required to produce one locally-manufactured vehicle for every one imported by 2024, shifting to a 1:1.5 ratio in 2025.

With 84,000 EVs imported between 2022 and 2023, manufacturers would need to produce 124,000 vehicles in 2025. To address declining sales, the EV Board introduced the EV3.5 package, extending the production period. The new framework allows a 1:2 production ratio in 2026 and 1:3 in 2027, albeit with reduced incentives.

However, some manufacturers have raised concerns that EVs made locally under EV3.0 may become less competitive due to higher costs compared to EVs imported under EV3.5.

In parallel, the EV Board approved a new tax structure to support hybrid vehicle production, aimed at facilitating a smoother transition from internal combustion engines (ICE) to EVs by 2025. The revised tax policy incentivizes hybrid electric vehicles (HEVs) and mild hybrids (MHEVs) with seating for up to 10 passengers, requiring manufacturers to invest heavily and use local parts.

From 2026 to 2032, HEVs emitting less than 100g/km of CO2 will face a 6% excise tax, while those emitting 101–120g/km will incur a 9% tax. For MHEVs, the rates are set at 10% and 12%, respectively, for the same emissions thresholds.

To qualify, HEV makers must invest at least THB3 Billion (MYR393 Million) from 2024 to 2027, while MHEV producers must invest THB1 Billion (MYR 131 Million) in 2026 and THB5 Billion (MYR655 Million) in 2028. Both must incorporate local components into their production.

These measures aim to solidify Thailand’s position as Southeast Asia’s hub for EV and electric motorcycle production.

Source: Bangkok Post