Skip to site menu Skip to page content

Daily Newsletter

03 November 2023

Daily Newsletter

03 November 2023

Thailand announces extended EV subsidies for 2024-2027

Incentives aimed at boosting local market to make the sector more attractive for FDI

David Leggett November 03 2023

The Thai government has agreed to offer domestic consumers subsidies worth up to THB100,000 (US$2,800) between 2024 and 2027 for the purchase of domestically-made battery electric vehicles (BEVs), as it looks to establish the country as the main BEV manufacturing hub in southeast Asia.

The new "EV3.5" subsidy was signed off by Prime Minister Srettha Thavisin this week and is a scaled-down version of the existing subsidy programme, which offers buyers between THB70,000 and THB150,000 per vehicle.

That programme is scheduled to expire at the end of this year.

Under the new EV3.5 package, subsidies will range between THB50,000 and THB100,000 for vehicles priced below THB2m and with a battery size of at least 50 KWh, while smaller BEVs will qualify for subsidies ranging between THB20,000 and THB50,000. BEVs in Thailand typically cost between THB1.2m and THB1.7m.

The subsidy cut reflects the rapid expansion of the domestic BEV market this year and the consequent rising cost to the tax-payer. BEV sales increased sevenfold to 50,340 units in the first nine months of 2023, way more than any other market in South-East Asia.

The Federation of Thai Industries (FTI) said the incentives under the EV 3.5 programme are “appropriate for current market conditions.”

Rapid growth in domestic BEV demand and pro-active government policies have helped attract significant investment in the country, with a growing number of vehicle manufacturers having announced plans to produce BEVs in the country in the last year - particularly Chinese companies including Changan Auto, BYD, Geely, Great Wall Motors, SAIC Motor and Chery Auto.

Narit Therdsteerasukdi, secretary-general of the Board of Investment, said in the first two years of the EV3.5 programme import duties on completely built-up electric vehicles costing up to THB2m will be reduced by up to 40%, while excise taxes will be reduced to 2% from 8%. He told reporters: “The new EV3.5 package shows that the Thai government's will continue to support the BEV industry and push Thailand as a regional manufacturing hub that welcomes investors.”

High upfront costs could be detrimental towards the growth of the off-highway EV market

The global off-highway electric market is expected to grow at a CAGR of 17.4% by 2030, per GlobalData. Despite the strong growth, high upfront costs may pose a challenge. Due to the high capacity of these vehicles, they consume large amounts of power from a number of battery packs installed on the vehicle, whose high cost in turn adds to the cost of the vehicle, thereby increasing the initial cost. However, governments worldwide are offering subsidies and tax exemptions in order to help customers to counter the initial purchase cost.

Newsletters by sectors

close

Sign up to the newsletter: In Brief

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Thank you for subscribing

View all newsletters from across the GlobalData Media network.

close