Thailand Proposes 35% EV Tax to Boost Domestic Production

The Office of Trade Policy and Strategy (OTPS) under Thailand's Ministry of Commerce has announced a strategic shift to bolster the nation's automotive sector. Director Nantapong Jiralertpong stated that while Thailand's electric vehicle (EV) market is growing rapidly, it currently relies heavily on imported technology and components rather than domestic production. To address this, the government is considering a 35% tax on electric vehicles to incentivize manufacturers to establish production bases for EVs and Hybrid Electric Vehicles (HEVs) within Thailand.

Currently, Thailand remains a major automotive hub, ranking first in ASEAN and eleventh globally. However, data from the past five years shows that 87% of Thailand's passenger car exports still consist of internal combustion engine (ICE) vehicles, with diesel models accounting for 47% of the total value. As the global market shifts toward new energy vehicles, officials are concerned that failing to localize production could threaten domestic employment and the country's long-term industrial competitiveness.

For residents and travelers, this policy shift may eventually influence the availability and pricing of various vehicle models in the Thai market. While the proposal aims to secure the future of the local automotive supply chain, specific implementation timelines and the exact scope of the tax remain to be confirmed by the government.