Thailand’s cabinet has approved a series of tax incentives to promote a shift to electric vehicles (EVs), as reported by Nikkei Asia on February 18. Incentives include lowering tariffs by 20% to 40% and cutting the excise on imported EVs to 2% from 8%. For automakers in Thailand, the incentive package also offers subsidies between THB70,000 and THB150,000 (USD2,150 and USD4,625) to each electric car and THB18,000 (USD555) to each electric motorcycle. Automakers benefiting from the scheme will be required to start manufacturing EVs by 2024. These incentive measures are expected to add 7,000 EVs in the first year of implementation, in alignment with Thailand’s goal of having EVs account for 50% of all new car registrations by 2030.
As the largest auto-manufacturing hub in Southeast Asia, Thailand saw its automotive output slashed by 29.1% YoY to 1.43m units in 2020 amid the pandemic. The country hopes to revitalize the auto industry and become a regional hub of EVs with the introduction of this incentive package. Last March, Thai authorities raised its initial target of having 30% EVs in all car output by 2030 to 50%, aiming for a 100% penetration by 2035. The electrification shift may reshuffle Thailand’s auto market, which is currently dominated by Japanese automakers that mainly produce gasoline-powered cars and hybrids. Mercedes-Benz [DAI:GR] will become the first major automaker to produce EV in Thailand this year, followed by Japan’s Mitsubishi Motor [7211:JP] and China’s SAIC Motor [600104:CH].