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 production to EVs 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.
The latest incentive package announced includes:
The incentives will initially apply to some 27 model types of EVs comprising of:
The package is a follow-up to earlier February subsidy programs to encourage EV production and purchases, which include:
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.
The country is keen to play a key part in becoming a hub for EV production, however, there are challenges facing manufacturers. These range from insufficient infrastructure to financial barriers.
Insufficient EV infrastructure development is one barrier to Thailand developing a holistic EV manufacturing industry. According to the Bangkok Post, the country could take up to a decade to produce EVs effectively since existing supply chains are tailored towards manufacturing parts and bodies for vehicles with internal combustion engines (ICE).
There is also a lack of charging stations throughout Thailand, with only 1,000 or so public charging points compared to around 30,000 gas stations — there is also a lack of home charging stations. Further, many Thai consumers are concerned about EV performance barriers including reliability, batter lifespan, range, engine power, and charging time.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected].
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ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)
