Deputy Finance Minister Paopoom Rojanasakul announced on Monday that Thailand intends to introduce tax incentives for plug-in hybrid vehicle manufacturing, with the changes slated to take effect in 2026, pending approval.
The proposed tax framework would be based on each vehicle’s battery range per charge, offering lower taxes for vehicles with longer ranges. Mr. Paopoom explained this, noting that the cabinet will review the proposal by April.
As the largest auto production hub in Southeast Asia, Thailand serves as a key manufacturing and export base for leading global automakers such as Toyota and Honda.
However, the automotive industry is currently experiencing a significant downturn.
Last year, auto production in Thailand dropped to its lowest in four years, decreasing by ten percent, with domestic sales and exports declining by 26% and 8.8%, respectively.
Chinese electric vehicle manufacturers, such as BYD and Great Wall Motors, have invested over $3 billion in Thai facilities, intensifying competition with steep discounts in a sector that contributes 10% to the national GDP.
Japanese automakers, including Toyota, are negotiating with the Thai government to launch a trade-in program to boost vehicle sales, as reported by Reuters last month.
Additionally, the Finance Ministry is looking to implement credit guarantees for pickup truck purchasers, as stated by Mr. Paopoom, with these incentives expected to launch before the annual motor show at the end of March.
