The Thai government has approved a package of new investment incentives covering the electric and hybrid vehicles segments, replacing existing incentives that have been available since 2018.

The Board of Investment (BoI), chaired by prime minister Prayut Chan-o-cha, now offers three year corporate income tax holidays for investments in the production of plug in hybrid vehicles and key related components while, for battery electric vehicles (EVs) and related components, the income tax holiday is now eight years. 

Incentives are available for all types of electric and plug in hybrid vehicles, including passenger cars, buses, trucks, motorcycles as well as ships.

Companies investing in the manufacture of four wheel passenger vehicles must invest a minimum of THB5bn to qualify for the incentives while projects involving the production of motorcycles, three wheelers, buses and trucks will benefit from a three year corporate income tax holiday.

Producers of EVs parts including high voltage harnesses, reduction gears, battery cooling systems and regenerative braking systems will enjoy eight year tax holidays.

Manufacturers of battery modules and fuel cells for sale locally will also get a 90% import duty discount on raw materials and parts not available locally for up to two years.

The new incentives are designed to make Thailand a regional production hub for hybrid and electric vehicles.

BoI general secretary Duangjai Asawachintachit said in a statement "the new incentives will help accelerate the development of EV production and related supply chain in Thailand, allowing the entire sector to move into higher gear".