The National Electric Vehicle Policy Committee, or EV Board, has agreed to introduce a three-tier excise tax structure for EVs, with the highest rate applying to completely built-up imports.
Speaking after the EV Board’s meeting on Thursday, Pornchai Thiraveja, director-general of the Excise Department, said under Tier 1, EVs that meet local content requirements or are produced domestically are subject to a relatively low excise tax rate.
Under Tier 2, vehicles assembled domestically using imported components are subject to a higher excise tax rate than those under Tier 1. Tier 3 applies to EVs imported as complete vehicles, and results in the highest excise tax rate.
The department plans to initially determine the excise tax rate for Tier 3, though importers will be given a grace period to allow them time to adjust, he said.
According to Mr Pornchai, the tax measures have three objectives: to encourage greater domestic investment in the industry; to promote Thailand as a regional automotive export hub, particularly for right-hand-drive vehicles; and to increase the use of local content to develop a domestic supply chain for the industry.
In addition, the EV Board plans to revise the method used to calculate local content in the automotive industry by taking into account local content that has a genuine impact on the vehicle itself, he noted.
The three-tier tax structure is also intended to curb EV imports and encourage manufacturers to establish more production bases in Thailand, said Mr Pornchai.
The current EV excise tax rate is 2% for vehicles produced at domestic plants that received investment promotion from the Board of Investment, and 8% for vehicles produced domestically but not receiving such promotion. For imported EVs, the excise tax rate is 10%.
“Therefore, the excise tax rate for the third tier should probably be higher than 10%,” he said.
CRITICAL JUNCTURE
In a related development, Rujipun Assarut, assistant managing director of Kasikorn Research Center (K-Research), said Thailand’s automotive industry is approaching a turning point.
Domestic vehicle production continues to decline, while vehicle imports have increased steadily, particularly battery electric vehicles (BEVs). BEVs accounted for 72% of Thailand’s total vehicle import value during the first seven months of 2026.
For the period, Thailand imported more than 69% of its total vehicle imports from China, valued at US$1.69 billion. Japanese vehicles accounted for 12%, valued at $289 million, followed by Malaysia at 6% ($147 million), Indonesia at 3% ($66 million), and other countries at 10% ($241 million).
According to K-Research, BEV sales in Thailand are expected to continue growing this year and could account for one-third of total vehicle sales.
Total vehicle sales are projected to reach 675,000 units, with BEVs accounting for 31% while internal combustion engine vehicles comprise 39%.
MONITORING
The government is considering measures to accelerate the automotive industry’s transition to environmentally friendly vehicle production, covering both BEVs and hybrids.
The proposed measures would use excise tax incentives to encourage manufacturers to shift from importing vehicles towards domestic production, while increasing the use of locally sourced components and creating greater value added within the Thai economy.
“As a result of these measures, vehicle imports are expected to decline while competition decreases. Vehicle prices are forecast to rise and domestic production is expected to increase. The use of locally sourced parts is expected to increase and will need to be monitored,” said Mr Rujipun.
“How much this will actually add value remains to be seen. Vehicle exports are expected to increase, but the question is whether they will meet the standards required by trading partners.”
Establishing criteria for the value added from locally sourced parts, along with effective monitoring and enforcement of compliance with the conditions, are essential to determine the long-term success of the measures, he said.
If the measures are implemented as targeted, they are expected to help Thailand’s vehicle production return to growth in 2027, following a forecast for a contraction of 1.8% this year, according to K-Research.