Detailed Interpretation

Content

Thailand recently held the first meeting of the National Electric Vehicle Policy Committee for 2024 and announced new measures to support the development of electric commercial vehicles such as electric trucks and electric buses, aiming to help Thailand achieve carbon neutrality as soon as possible. According to the new measures, the Thai government will provide tax incentives to eligible electric vehicle-related companies.

Tax relief

From the date when the policy officially takes effect until the end of 2025, enterprises purchasing domestically produced or assembled electric commercial vehicles in Thailand can enjoy a tax exemption equivalent to twice the actual selling price of the vehicle, without any price restrictions. Enterprises purchasing imported electric commercial vehicles can also benefit from a tax exemption equivalent to 1.5 times their actual selling price.

Government perspective

“The new measures announced this time mainly target large commercial vehicles such as electric trucks and electric buses, encouraging companies to achieve net zero emissions goals,” said Narit Thatsathira, Secretary General of the Thailand Board of Investment. He added that this will further strengthen the development of Thailand’s electric vehicle ecosystem and consolidate its position as a manufacturing hub for electric vehicles in Southeast Asia.

Not only cars

The meeting approved a series of investment promotion measures to support the construction of electric vehicle energy storage systems, such as providing subsidies for battery manufacturing companies that meet the standards, in order to attract more battery manufacturers with advanced technology to invest in Thailand. The new measures also supplement and adjust the incentives for the development of electric vehicles in the new phase. For example, the range of electric vehicles eligible for purchase subsidies has been expanded to include passenger cars with a capacity not exceeding 10 people, and subsidies are also provided for eligible electric motorcycles.

The effectiveness of the measures

Industry growth

The current incentive measures for electric vehicles in Thailand will be announced in the fourth quarter of 2023, providing consumers who purchase electric vehicles from 2024 to 2027 with a maximum subsidy of THB 100,000 (approximately USD 2,778). In order to achieve the goal of electric vehicles accounting for 30% of Thailand’s automobile production by 2030, according to the incentive measures, the Thai government will exempt foreign car manufacturers that meet certain criteria from import duties and consumption taxes on complete vehicles between 2024 and 2025.

At the same time, they are required to produce a certain number of electric vehicles locally in Thailand. Thai media predicts that from 2023 to 2024, imports of electric vehicles in Thailand will reach up to175,000 units, which is expected to further stimulate domestic production. By the end of 2026, it is estimated that Thailand will produce between350,000 and525 ,000 units of electric vehicles.

Effect prediction

In recent years, Thailand has continuously introduced measures to encourage the development of electric vehicles and has achieved certain results. In 2023, the number of new registrations for pure electric vehicles in Thailand exceeded 76,000, a significant increase from 9,678 in 2022; the total number of new registrations for various types of electric vehicles in Thailand throughout 2023 exceeded 100,000, a year-on-year growth of 380%. Krisada Utamote, Chairman of the Electric Vehicle Association of Thailand, stated that in 2024, sales of electric vehicles in Thailand are expected to further increase with registration numbers potentially reaching up to 150,000.

Car manufacturers’ response

In recent years, many Chinese car companies have invested in setting up factories in Thailand, and Chinese electric vehicles have become a new choice for Thai consumers. According to statistics, by 2023, Chinese brand electric vehicles will account for 80% of the market share in Thailand’s electric vehicle market. The top three most popular electric vehicle brands in Thailand are all from China: BYD, SAIC Motor MG, and NIO.

Jiang Sa, the director of the Thai Automotive Research Institute, stated that Chinese electric vehicles have become increasingly popular in the Thai market in recent years, increasing the popularity of electric vehicles and bringing supporting industries such as batteries to Thailand through Chinese car companies’ investments. This has also driven the development of the electric vehicle industry chain and will help Thailand become a leading electric vehicle market in ASEAN.