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Thailand Issues New Incentive Package for Electric Vehicle Industry
In February 2022, Thailand released new government incentives for its electric vehicles (EV) industry as part of its ambitious plan to transform 50 percent of its total auto by 2030 and become a production base for cleaner vehicles in Southeast Asia.
The new incentive package includes significant exemption in import duty and excise tax for a wide range of EV models, not to mention previous subsidies announced in February.
The EV incentive package reflects ASEAN’s gradual investment into environmentally friendly transportation to align with the global shift to electric vehicles by major car manufacturers. According to a 2021 EV report, the total stock of ASEAN electric-powered vehicles reached 3.4 million in 2019 and is forecasted to rise amid improving economic development, growing population, and concern for the environment.
Within Southeast Asia, Thailand has consistently ranked first in terms of total auto production output, and 11th in the 2019 global ranking. The country annually manufactures 2 million internal combustion engine vehicles for major brands, such as Toyota, Honda, and Mitsubishi. In an attempt to preserve its leading reputation in the automotive industry, Thailand plans to attract 400 billion baht (US$12.08 billion) in investments over the coming years and support the production of 1.2 million EVs and 690 charging stations by 2036.
What is included in the incentive package?
The latest incentive package announced includes:
– A 40 percent reduction in import duty for completely built-up (CBU) of battery EVs priced up to 2 million baht ($61,805) and a 20 percent reduction for those priced between 2 million ($61,805) and 7 million baht (US$211,278) from 2022 to 2023; and
– Excise tax cut from 8 percent to 2 percent for imported EVs, which is predicted to add 7,000 EVs in the first year.
The incentives will initially apply to some 27 model types of EVs comprising of:
- – Eco-cars with 10 seats or less;
- – Electric pickups;
- – Hydrogen fuel cell-powered trucks;
- – EVs with 10 seats or less; and
- – Plug-in four-door passenger pickups.
The package is a follow-up to earlier February subsidy programs to encourage EV production and purchases, which include:
- A 70,000 baht (US$2,111) subsidy is available per EV unit for passenger cars with 10 to 30 kWh battery capacity for completely knocked-down (CKD) and CBU units;
- A 150,000-baht (US$4,523) subsidy for each EV unit for passenger cars with more than 30kWh battery capacity for completely knocked-down (CKD) and CBU units;
- An 18,000-baht subsidy for electric motorcycles from eligible car producers between 2022- 2023;and
- Exemption of import duties on important electrical components: batteries, traction motors, compressors for battery EVs, battery management systems, drive control units, and reduction gear between 2022-2025.
The subsidy programs are funded by 3 billion baht (US$90.4 million) from the 2022 central budget and from the longer-term 40-billion-baht (US$1.2 billion) investment in the EV industry between 2023 – 2025.
source : ASEAN Briefing
March 24, 2022
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