Thailand is discussing restructuring its vehicle excise tax, which is under study and tentatively planned to be implemented by 2026. This, it is hoped, will act as a catalyst to boost Thailand's electric vehicles (EVs) sales.
The country aims to achieve 30% share of EVs in total production by 2030.
The vehicle excise tax restructuring, presently under discussion with the industry stakeholders, will pave the way for increased adoption of eco-friendly vehicle and EVs in Thailand. The vehicle excise tax structure in Thailand is a levy tax based on CO2 emissions, with the restructuring aimed at increasing the tax rate on IC engine vehicles to the highest among all the vehicle categories.
It is hoped the move will help to bring down the price differences in IC engine and electric vehicles and make the EVs a more favourable product.
"The move is anticipated to gain support from the government as well as OEMs as the country has been struggling with harmful PM2.5 levels in the country," says Bakar Agwan, Senior Automotive Consultant at GlobalData.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The present vehicle excise tax varies between 20-50% for IC engine vehicles depending upon the type of vehicle and the engine capacity. For hybrid electric and fuel cell vehicles, the current tax rate is 10%, according to The Excise Department.
Agwan maintains that the excise tax restructuring will support the existing government efforts for EV ecosystem development in Thailand. "The government has been putting in other efforts to make EV a success story in Thailand which includes a possible car trade-in scheme on cards," he notes.
"This will stimulate the EV purchases in the country strengthening the EV infrastructure and also bagging new investments with new set of manufacturing privileges announced by the Board of Investment (BOI) Thailand."
Agwan adds that most of Thailand's EV boosting efforts have been focused on the supply/manufacturing side.
"The new vehicle tax and the possible car trade-in scheme will stimulate the demand/customer side. Thailand needs more such demand-side efforts in terms of incentives, subsidy, tax benefits etc. to witness an upsurge in EV adoption," he says.