Thailand’s Finance Ministry might consider reducing the tariffs on electric vehicles (EVs) as part of the national EV promotion scheme, as reported by Bangkok Post on November 29 citing an unnamed ministry source. In Thailand, the electric cars imported from China enjoy zero import duty attributed to the China-ASEAN Free Trade Agreement. Other EV exporters such as Japan and South Korea are saddled with 20% and 40% import tax rates, respectively. Notably, most of the EVs imported from Japan face an 80% rate as their Japanese components surpassed the level required for the 20% tariff. Thailand is expected to carry out the comprehensive EV promotion campaign in early 2022 and implement the plan step-by-step to reserve time for all automakers to adjust their businesses, according to the ministry source.
Thailand is the largest automobile manufacturer in the Association of Southeast Asian Nations (ASEAN) district by selling 1.007m vehicles in 2019, while Japanese auto brands took up an over 90% share. However, the fossil-fueled car market in Thailand is shrinking due to the COVID-19 pandemic’s disruption to the global supply chain, together with the country’s goal of raising the share of electric cars to at least 30% in 2030. Chinese state-owned automaker SAIC Motor’s [600104:CH] subsidiary brand MG claimed that it occupied 90% of Thailand’s emerging EV market. The tariff reduction plan might reshuffle the market with more affordable options for Thai consumers. Citing Finance Minister Arkhom Termpittayapaisith earlier in November, the government is anticipated to subsidize the prices of EVs to bring the price closer to the costs of gasoline-powered cars.