Thailand moves to tax imported EVs more than local models

Thailand, the largest auto-production hub in Southeast Asia, is considering imposing higher taxes on imported electric vehicles (EVs) amid increased competition from low-priced Chinese models. This move aims to protect the country's thriving domestic auto-manufacturing industry, which contributes about 3% to the nation's GDP and provides employment for over half a million people.

Pornchai Thiraveja, chief of the excise department, announced the proposal at a meeting with the EV policy board, suggesting a three-tier excise-tax system. The lowest rate would apply to EVs assembled in Thailand, the highest to fully imported vehicles, while an intermediate rate would be levied on models relying on a mix of domestic and imported components.

The board plans to use excise taxes as the primary tool to encourage manufacturers and suppliers to invest in Thailand and utilize more locally produced parts. This policy shift comes as Chinese automakers have heavily invested in local factories in an effort to expand EV production in the region. However, the influx of inexpensive Chinese models has intensified competition and put pressure on locally produced vehicles and established Japanese automakers.

Thailand is now seeking incentives to favor domestically manufactured EVs over imports, as the country competes with Indonesia and Vietnam for automotive investment.