With Electric Vehicle Sales Soaring Thailand Calibrates Subsidy Package

Thailand is planning to introduce a new purchase subsidy scheme for domestically made electric vehicles (EVs) from 2024 to 2027.

To maintain its position as Asia’s fourth-largest automobile assembly hub, Thailand has been offering sweeteners to both EV and EV battery makers, together with tax cuts to local EV buyers.

The new arrangement, known as EV3.5, will offer subsidies of up to 100,000 Thai baht ($2,790) per car, to attract additional foreign investment and position Thailand as a regional EV manufacturing hub. The existing support scheme, which ranges from 70,000 to 150,000 Thai baht per EV, will expire at the end of 2023.

The Thai government has also agreed to reduce the import duty on completely built-up (CBU) EVs by up to 40% for 2024 and 2025. This reduction will apply to vehicles priced at up to two million Thai baht per unit.

According to Thailand Business News, In the second quarter of 2023, EVs made up 6.4% of all passenger car sales in the region, a significant increase from the 3.8% recorded in the first quarter.

The Thai government aims to have EVs account for 30% of vehicles sold by 2030 and has already seen investments from several Chinese and European EV makers.

EV sales in Southeast Asia are led by Thailand, Vietnam, and Indonesia with Chinese automakers such as Great Wall Motor and BYD outpacing their US and European competitors.