Thailand moves to tax imported EVs more than local models

Bangkok - Thailand, Southeast Asia's largest auto-production hub, is contemplating higher taxes on imported electric vehicles amid intensifying competition from low-priced Chinese models. The national EV policy board agreed in principle to introduce a three-tier excise-tax structure, with the lowest rate for EVs produced in Thailand and the highest for fully imported models.

An intermediate rate would apply to vehicles with partly imported components. The exact tax rates still need to be determined. The proposal aims to incentivize automakers and suppliers to manufacture in Thailand and boost the usage of locally-made parts. The shift comes as imported models have fueled aggressive pricing, putting pressure on domestic vehicles and Japanese automakers that have historically dominated Thailand's car industry.

Thailand, home to about 3% of global GDP, employs over half a million people and is a significant export contributor. The country is now aiming to safeguard its manufacturing base during the transition to electric vehicles. Chinese automakers have invested billions in local factories, but authorities are increasingly seeking incentives for companies to manufacture within the country instead of relying on imports.

Additionally, Thailand faces mounting competition for automotive investment from neighboring Southeast Asian nations like Indonesia and Vietnam, which are offering incentives to lure new models and factories.