Thailand plans to introduce tax incentives for the manufacturing of plug-in hybrid vehicles (PHEVs), with changes potentially taking effect from 2026, pending approval, Deputy Finance Minister Paopoom Rojanasakul announced on Monday.
Under the proposed scheme, tax rates would be determined based on a vehicle’s electric-only travel range per battery charge, offering lower taxes for longer ranges. Paopoom stated that the proposal is expected to be submitted to the cabinet by April.
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Thailand, recognized as Southeast Asia’s largest automotive production hub and an export base for leading automakers such as Toyota and Honda, has experienced a downturn in its automotive industry. The country’s auto production declined by 10% last year, reaching a four-year low, with domestic sales and exports decreasing by 26% and 8.8%, respectively.
The market dynamics have been further influenced by Chinese electric vehicle manufacturers like BYD and Great Wall Motors, which have invested over $3 billion into facilities in Thailand. Their competitive pricing strategies are exerting pressure on existing competitors in a sector that contributes approximately 10% to Thailand’s gross domestic product.
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In response to these challenges, Japanese brands, including Toyota, have engaged in discussions with the Thai government regarding a trade-in program aimed at stimulating sales. Additionally, the Finance Ministry plans to introduce credit guarantees for pick-up truck buyers, with these measures anticipated to be implemented before the annual motor show at the end of March.
Source: Reuters