Thailand approves wider incentives plan for EV sector

Thailand's National Electric Vehicle Policy Board has approved a plan to offer commercial electric truck and bus purchase tax incentives, alongside cash grants for electric vehicle (EV) battery cell manufacturers.

The new measures will complement the previous package it approved last year for the passenger vehicle sector. But the new measures are pending final consideration and approval by the Cabinet.

Special tax deductions will be provided to eligible firms that are purchasing electric buses and trucks until the end of 2025. Firms purchasing those electric commercial vehicles manufactured domestically candeduct expenses of two times the actual price of the vehicles without a price ceiling, while deductions for imported vehicles will only be 1½ times.

"We believe this will significantly increase the adoption of electric trucks and buses, reduce pollution from the transportation and manufacturing sectors, and support companies' moves to reach their net-zero targets," said Thailand's Board of Investment's (BOI) secretary-general Narit Therdsteerasukdi.

The cash grants for EV battery cell manufacturers will be provided through Thailand's Competitiveness Enhancement Fund. Further details were undisclosed, other than an application submission deadline at the end of 2027 and a set of requirements. Other benefits under its Competitiveness Enhancement Act may also be provided to EV battery cell manufacturers, according to the BOI announcement.

Thailand's Competitiveness Enhancement Act, which came into force in 2017, led to the country establishing the 10bn baht ($280mn) Competitiveness Enhancement Fund to invest in its targeted industries. These targeted industries include next-generation automotive and smart electronics, according to a policy monitor by the United Nations Conference on Trade and Development. The country provides tax incentives to eligible firms ranging from corporate income tax (CIT) exemption, CIT deduction, to import duties reduction under the act.

Thailand's auto output in 2023 fell by 2.2pc on the year to 1.84mn units but its finished car exports rose to 1.12mn units, marking the highest figure since 2019. Battery EV registrations almost quintupled from a year earlier to about 100,000 units in 2023.

By Joseph Ho