The EV board has approved three tiers of electric vehicle (EV) taxes to encourage domestic production; the proposal is expected to be submitted to the Cabinet in September 2026.

The EV board approved a three-tiered excise tax structure for electric vehicles to encourage domestic production investment. The Excise Department was instructed to expedite consideration of appropriate tax rates, and the proposal is expected to be submitted to the Cabinet in September 2026.

On September 10, 2569, Mr. Pornchai Theeravech, Director-General of the Excise Department, revealed that the National Electric Vehicle Policy Committee (EV Board) meeting today approved the principle of restructuring the excise tax on electric vehicles (EVs) to support the industry's transition. Thailand's electric vehicle industry has been growing continuously, accounting for approximately 2% of GDP and representing 15% of total exports. Furthermore, Thailand has a strong production base due to its reputation as the "Detroit of Asia."

However, it was found that although the use of EVs in the country has increased, the majority are still imported, which may pose a risk to the domestic production industry. Therefore, the Excise Department has proposed a tax restructuring plan with three main objectives:

1. Attract investment to reduce reliance solely on commercial imports.

2. Promote Thailand as an export hub for countries in the region and countries that use right-hand drive vehicles.

3. Increase the proportion of domestically produced components (Local Content) and develop the supply chain in Thailand. The EV board has established a subcommittee specifically to oversee this matter.

“The EV board has agreed in principle on all three points, which will be driven solely by excise tax incentives, without any budgetary constraints. We previously used EV 3 and EV 3.5, which at that time required a certain budget, but this time, excise tax incentives will be used to achieve all three objectives.”

The new excise tax structure will be divided into three tiers to incentivize investors, namely:

• The lowest tax rate applies to domestically produced businesses that use domestically sourced automotive parts (Local Content) according to specified criteria.
• A moderate tax rate is offered to businesses importing cars for market testing or as a starting point for investment, along with planning and investing in establishing manufacturing plants domestically.
• The highest tax rate applies to businesses that import cars solely for sale, without investing in manufacturing in Thailand.

The highest tier of taxes will come into effect first. Private sector representatives from three automotive associations have already expressed agreement with this approach, but have requested further discussions regarding the grace period before official implementation to allow businesses time to adjust.

Regarding clarification on tax rates, the EV subcommittee has assigned the Ministry of Finance, through the Excise Department and related agencies, to expedite consideration and propose appropriate guidelines to reach a conclusion.

Mr. Pornchai discussed the guidelines for establishing a grace period for importing electric vehicles (EVs), stating that this matter requires discussion with the private sector. He explained that the import process takes time and cannot be implemented immediately through simple orders and imports. Joint planning, encompassing both production and marketing aspects, is necessary.

Furthermore, regarding the criteria for using domestically produced automotive parts (Local Content), the Director-General of the Excise Department stated that while some cost value was included in the calculation in the past, this time there is a plan to change the criteria to focus on using high-value and truly critical automotive parts. Efforts are underway to establish a working group or subcommittee to oversee and define the details specifically for this matter.

Mr. Lawaron Saengsanit, Permanent Secretary of the Ministry of Finance, stated that appropriate tax measures will be considered and are expected to be finalized by September, after which they will be submitted to the Cabinet for approval. He emphasized that this decision rests with the Cabinet.

Mr. Narut Teodsathirasak, Secretary-General of the Board of Investment (BOI) , stated that the meeting discussed plans to prepare for the increasing volume of used batteries entering the market in the future. The focus is on comprehensive management, from developing a platform to track batteries throughout their lifecycle, to reuse and recycling. This includes aspects such as creating a "second life" for reuse in energy storage systems or recycling some batteries to extract essential minerals for reuse.

In addition, the meeting also agreed to establish guidelines for the disposal of end-of-life vehicles, which is considered another new business opportunity that will arise simultaneously.

Mr. Narut said that in order to make the operation clear and concrete, the EV board meeting resolved to appoint two subcommittees, namely:

1. The Sub-committee for Promoting Electric Vehicle Production, chaired by the Minister of Industry, oversees development, supply chain, relevant standards, and the management of used batteries and end-of-life vehicle disposal.

2. The Sub-committee on Charging Station Network Development, chaired by the Minister of Energy, is responsible for driving the expansion of charging station infrastructure to ensure comprehensive coverage.

The meeting also assigned the Permanent Secretary of the Ministry of Finance to consider promoting commercial electric vehicles such as electric buses and trucks, as well as electric motorcycles, as these groups have not shown significant growth in the past, in order to stimulate increased domestic production and usage.

The meeting acknowledged the progress in the development of the country's electric vehicle (EV) industry, which has been ongoing for at least five years. It was found that consumer acceptance has increased significantly, reflected in the current number of new vehicle registrations, where electric vehicles (including BEVs, Hybrids, and Plug-in Hybrids) account for more than 50% of all new vehicle registrations this year.

Mr. Narut said that compared to five years ago, battery electric vehicles (BEVs) accounted for only 0.3% of the market, but now they have risen to almost 30%. Meanwhile, hybrid vehicles currently account for around 23%. Part of the contributing factor is the volatility in oil prices in recent times, which has stimulated consumer purchasing decisions.

The government's policy is not only focused on stimulating demand, but also on creating a complete electric vehicle (EV) ecosystem. This includes establishing a base for EV production, key component manufacturing, and developing innovative charging stations to cover the entire country. The goal is to promote Thailand as the strongest and largest EV manufacturing hub in ASEAN, and among the top in the world.

Furthermore, the government prioritizes promoting all types of electric vehicles, not limited to BEVs (Battery Electric Vehicles), but also including hybrid and mild hybrid vehicles, to help existing automakers adapt and transition to new technologies steadily.

Since the beginning of this year, four major Japanese automakers – Mitsubishi Motors, Isuzu, Honda, and Mazda – have successively announced plans for continued investment in Thailand, totaling more than 50 billion baht. This investment is expected to continue until 2029-2030, reflecting the confidence of foreign investors in the Thai automotive industry.