BANGKOK, Thailand – Thailand’s Finance Ministry is preparing a major overhaul of excise tax rules for electric vehicles (EVs), linking tax rates more closely to domestic manufacturing and the use of locally produced components. The proposed structure aims to encourage foreign automakers to establish production facilities and source more parts from Thai suppliers rather than relying on imported finished vehicles. Under the proposed framework, EV manufacturers operating factories in Thailand and meeting the required local content threshold would qualify for a 10% excise tax rate. Companies with domestic factories but insufficient use of locally made components could face rates of 15–20%, while fully imported EVs would be subject to a 35% rate.
Finance Permanent Secretary Lavaron Sangsnit said the changes are intended to encourage automakers to deepen their investment in Thailand and support the development of a domestic supply chain. The 35% excise tax on imported EVs has already been approved by the Cabinet on November 3, 2026. It will take effect on January 1, 2027, replacing the previous rates of 10% for battery electric vehicles (BEVs) and 15% for range-extended electric vehicles (REEVs). Previous EV 3.0 and EV 3.5 incentive programs helped expand the market and attract manufacturers to establish eight factories in Thailand. However, the relatively low tax on imported vehicles has encouraged some companies to continue importing finished cars rather than investing in local production.
The higher tax is intended to change that balance. One additional company has already expressed interest in investing in Thailand, potentially bringing the number of EV factories to nine, with a tenth also considered possible. The ministry is also preparing to revise the way local content is calculated to ensure that the figures reflect genuine use of domestically manufactured components. The new criteria are expected to take effect within about three years, around 2030, giving manufacturers time to adjust. The Excise Department is discussing the proposed framework with the Federation of Thai Industries and considering the use of the Made in Thailand (MIT) standard to determine local content. Initial details are expected soon, although the minimum proportion of locally sourced components has yet to be decided.
The department is also reviewing tax incentives for the production of high-value EV components, particularly batteries. Many automakers continue to retain control of battery technology and production within their overseas parent companies, making it difficult for Thailand to attract investment in this critical part of the supply chain.
Ratchada Vanichakorn, Deputy Director-General of the Excise Department, said attracting battery manufacturing investment remained challenging because of the strategic importance of the technology. The government is therefore considering incentives that could encourage domestic production of other high-value EV components. One option under study is to add two more tax levels to the existing incentive structure. The current lowest rate of 2% applies to vehicles meeting strategic component requirements, such as using domestically produced batteries. A revised rate of around 10% could be introduced, alongside more flexible conditions covering other important components.
The ministry stressed that the 35% tax on imported EVs has been approved, while the additional tax structure and revised local content requirements remain under consideration. The longer-term objective is to move Thailand beyond vehicle assembly towards becoming a regional production and export base for EVs and their components.
