Thailand approves EV 3.5 incentive plan for electric vehicles through 2024

Thailand approves EV 3.5 incentive plan for electric vehicles through 2024

In 2021, Thailand unveiled its Bio-Circular Green (BCG) economic model, which includes a strategic action plan to achieve a more sustainable future, in line with global climate change mitigation efforts. On November 1st, Prime Minister and Finance Minister Setia Sathya chaired the inaugural meeting of the National Electric Vehicle Policy Committee (EV Board). The meeting discussed and approved detailed measures for a new electric vehicle adoption program, dubbed “EV 3.5,” which is expected to take effect on January 1, 2024. The plan aims to achieve a 50% market share for electric vehicles in Thailand by 2025. By promoting the adoption of electric vehicles, the Thai government hopes to reduce dependence on oil, reduce environmental pollution, and promote the development of the clean energy industry.

According to Nalai, Secretary-General of the Investment Promotion Committee and member of the Electric Vehicle Policy Committee, as Chair of the Electric Vehicle Policy Committee, Prime Minister Seta prioritises advancing Thailand’s role as a regional electric vehicle manufacturing hub. Aligned with the government’s ‘30@30’ policy target, by 2030 zero-emission vehicles must constitute at least 30% of total domestic automotive production – equating to an annual output of 725,000 electric cars and 675,000 electric motorcycles. To this end, the National Electric Vehicle Policy Committee has approved the second phase of electric vehicle incentives, EV3.5, spanning four years (2024-2027), to foster the sector’s continued expansion. Investment is being encouraged across passenger vehicles, electric pick-ups, and electric motorcycles. During the first nine months of this year (January-September), Thailand registered 50,340 new electric vehicles, marking a 7.6-fold increase compared to the same period last year. Since the government began promoting investment in the electric vehicle industry in 2017, total investment in the sector has reached 61.425 billion baht, primarily stemming from projects involving pure electric vehicles, pure electric motorcycles, key component manufacturing, and charging station construction.

Specific details under the EV3.5 measures are as follows:

1. Electric vehicles priced below 2 million baht with battery capacities exceeding 50 kWh will receive subsidies ranging from 50,000 to 100,000 baht per vehicle. Those with battery capacities below 50 kWh will receive subsidies between 20,000 and 50,000 baht per vehicle.

2. Electric pick-up trucks priced at no more than 2 million baht with a battery capacity exceeding 50 kWh shall receive a subsidy of 50,000 to 100,000 baht per vehicle.

3. Electric motorcycles priced at no more than 150,000 baht with a battery capacity exceeding 3 kWh shall receive a subsidy of 5,000 to 10,000 baht per vehicle. Relevant agencies will jointly deliberate to determine appropriate subsidy standards for submission to the Cabinet for further consideration. From 2024 to 2025, import duties on completely built-up (CBU) electric vehicles priced below 2 million baht will be reduced to no more than 40%; consumption tax on electric vehicles priced below 7 million baht will be lowered from 8% to 2%. By 2026, the import-to-domestic production ratio for vehicles shall be 1:2, meaning one imported vehicle for every two domestically produced vehicles. This ratio will increase to 1:3 by 2027. Concurrently, it is stipulated that batteries for both imported and domestically produced vehicles must comply with Thailand Industrial Standards (TIS) and pass inspections conducted by the Automotive and Tyre Testing and Research Centre (ATTRIC).