Thailand Plans 30% Tax on Imported EVs to Boost Local

Thailand is likely to introduce an excise tax of about 30% on fully imported electric vehicles. Finance Minister Ekniti Nitithanprapas told Bloomberg Television that authorities are finalizing the rate with the automotive industry, with a decision expected as soon as this month.

This planned tax marks a significant shift from Thailand's previous EV policy, which featured low import barriers. That earlier approach led to increased arrivals of lower-priced Chinese vehicles. The new measure is intended to support domestic investment and strengthen local supply chains, according to the minister.

Policy Shift to Protect Local Industry

Ekniti said protecting domestic investment was important. He explained that Thailand's free-trade obligations prevent it from directly changing tariffs, leaving excise taxes as the primary tool for supporting manufacturers based in the country. The government has identified EVs as one of seven priority industries in its next-stage economic development plans.

The move follows provisional approval last week by Thailand's EV policy board of a three-tier excise duty structure. Under the proposed framework, fully imported vehicles would face the highest tax rate. Vehicles made entirely in Thailand would be subject to the lowest rate. Locally assembled vehicles using imported components would fall into a middle band.

Encouraging Local Manufacturing Footprint

Ekniti reported that nine EV manufacturers have already established operations in Thailand, with several already exporting vehicles made in the country. He also said some carmakers currently importing vehicles from China and Europe have started talks with the government about establishing manufacturing operations in Thailand to qualify for the lower tax rates.

According to GlobalData, Just Auto's parent company, Thailand remains Southeast Asia's top vehicle production hub. This position is supported by its export base, Japanese OEM presence, policy backing for xEVs, and growing EV investment.

Production Forecasts and Industry Context

Despite facing weaker domestic sales and export pressures, EV production in Thailand is forecast to rise strongly. GlobalData says the biggest step-ups are expected in 2027 and 2029. The country's status as a production hub has been supported over many years by Japanese investment and a broad supplier base, which is key for plant-floor network automotive manufacturing.

The finance minister, when questioned on whether the final excise rate might land between 31% and 32%, said it "should be around" 30%.