Thailand will extend the production timeframe for battery electric vehicles (BEVs) and introduce incentives for hybrid electric vehicles (HEVs) to bolster its automobile industry, the nation’s Board of Investment (BOI) announced on Wednesday. The moves come amid a slowdown in the domestic auto market and broader economic challenges.
Under the current EV 3.0 incentive package, automakers are required to produce one locally manufactured vehicle for each imported BEV by the end of this year, increasing to 1.5 vehicles per imported unit in 2025. The newly implemented EV 3.5 package, effective 2024, will further escalate these ratios, requiring two vehicles per import in 2026 and three by 2027.
“The portion of the manufacturers’ production commitment not completed under the first package will be transferred to the conditions of the next incentive package,” said Narit Therdsteerasukdi, secretary-general of the BOI, noting the objective is to prevent market oversupply and avoid “a more severe price war.”
Thailand, Southeast Asia’s automotive hub, hosts major Japanese manufacturers like Toyota and Honda, and has attracted over $1.44 billion in Chinese EV investments from companies such as BYD, Great Wall Motors, and Changan. However, the domestic auto market has seen significant declines, with local sales dropping 36% in October, marking the 15th consecutive month of contraction.
In addition to extending production timelines, the BOI approved a reduced excise tax rate for certain locally produced hybrid EVs and mild hybrid EVs. Despite challenges, Narit expressed optimism that the revised measures would provide stability, stating, “These adjustments ensure a balanced approach to maintaining competitiveness and meeting production commitments.”
