Thailand rolled out incentives in a bid to woo Chinese auto manufacturers, with an ambitious target to convert about 30 percent of the country’s annual vehicle production into electric vehicles by 2030.
In the first quarter of 2025, electric vehicle (EV) sales in Thailand experienced a notable surge, with a 55 percent increase compared to the same period last year. This growth pushed EV sales to a record high for any first quarter.
Best selling electric cars were from BYD and MG (SAIC).
The Thailand electric car segment is being driven by well designed government incentives, including an expanded trade-in scheme, which encourages consumers to upgrade to newer vehicles.
Thailand has implemented a range of incentives to accelerate the adoption of electric vehicles (EVs), reflecting its commitment to a greener future and its ambition to become a regional EV hub.
These incentives are designed to make EVs more affordable and attractive to consumers and manufacturers alike.
Here’s a breakdown of the specific incentives:
Duty Reduction Privileges: For imported completely built-up (CBU) EVs, Thailand offers duty reduction privileges. For instance, CBU EVs with a battery size over 10 kWh and a suggested retail price (SRP) of less than 2 million THB can enjoy a reduced import duty rate from 80% to 40%. If these vehicles are imported under a Free Trade Agreement (FTA) with a duty rate of less than 40%, they are exempt from import duty.
Excise Tax Reduction: The excise tax for BEV passenger cars has been reduced from 8% to 2%, and for BEV pick-up trucks, the tax is set at 0%. This significant reduction aims to lower the final cost to the consumer.
Excise Tax Subsidy: An excise tax subsidy is available for electric motorcycles, pick-up trucks, and passenger cars, applicable to both imported and locally produced BEVs. This subsidy supports eligible manufacturers who also import CBU BEVs during 2022-2023, provided they offset production by producing any model of vehicle or vehicles similar to the imported models at an import to local production ratio of 1:1 by the end of 2024.
Customs Duty Reductions and Exemptions: Specific regulations have been approved that provide customs duty reductions and exemptions for certain types of imported EVs. This includes a 40% reduction of customs duty for EVs with a retail price up to 2 million THB and a 20% reduction for those priced between 2-7 million THB. If the applicable customs duty is already less due to an FTA, the EVs may be exempt from customs duty.
Tax Deductions and Cash Grants: Special tax deductions are available for companies purchasing electric trucks and buses, along with cash grants for manufacturers of EV battery cells. These measures aim to reduce pollution and support companies in reaching net-zero targets.
These incentives are part of a comprehensive package from 2022 until 2025, aimed at increasing the demand for EVs, attracting investment in the EV industry, and encouraging the local manufacturing of EVs.
Meanwhile, the European and Japanese EV manufacturers are not sitting in the sidelines and watching this Chinese EV invasion.
Mercedes-Benz chose to manufacture the electric Mercedes-EQS in Thailand. The company also chose Thailand as one of its seven locations worldwide to produce high-performing Li-ion batteries.
BMW also had early success in the Thailand EV market with its charging station-focused strategy. As of 2022, the company has cornered almost one third of the total EV base in Thailand.
Toyota which is the largest vehicle manufacturer in Thailand, Mitsubishi which is the first automaker to export out of Thailand, and several other major auto brands have also announced investments in the Thai electric vehicle sector.
