Thailand Adjusts Electric Vehicle Incentive Policies to Boost Production and Exports

On July 30, Thailand adjusted its electric vehicle incentive policies, providing greater flexibility for automakers to meet production requirements and promote exports. Domestic demand for electric vehicles in Thailand has been lukewarm, and competition has intensified with the entry of Chinese automotive brands into the local market. Under the policy introduced in 2022, Thailand allowed automakers to import electric vehicles tax-free, on the condition that by 2024, the production of electric vehicles in Thailand must match the volume of imports, and by 2025, for every imported electric vehicle, 1.5 must be produced domestically. However, the Thailand Board of Investment announced that electric vehicles produced and exported from Thailand will now also count towards these targets, a change from the previous policy which only accounted for locally registered vehicles. This incentive policy, which includes tax reductions and price subsidies, has attracted over $4 billion in investments, including from Chinese companies BYD and Great Wall Motors. Narit Therdsteerasukdi, Secretary-General of the Thailand Board of Investment, stated, 'The approved policy revisions today will provide greater flexibility for automakers and help Thailand, which already leads the automotive manufacturing industry in Southeast Asia, become an important production base for electric vehicles.' As the second-largest economy in Southeast Asia, Thailand has been a regional hub for large automakers like Toyota and Honda for vehicle production and exports. In the emerging electric vehicle sector, Chinese automotive brands dominate the Thai market with a combined market share exceeding 70%. Last year, due to a sluggish economy, demand for electric vehicles in Thailand weakened, leading to a risk of oversupply in the industry, prompting the Board of Investment to extend the initial local production timeline. The board forecasts that the adjusted policy will enable Thailand's electric vehicle exports to reach approximately 12,500 units this year and 52,000 units by 2026. In April of this year, Thailand completed its first export of 660 electric vehicles.