Prospects are looking brighter for the electric vehicle (EV) industry in Thailand after the government on Tuesday approved two tax incentives in a bid to boost the production of such vehicles.
Following a Cabinet meeting on Tuesday, Thai Prime Minister Prayut Chan-o-cha announced that the annual road tax for electric-powered vehicles will be cut by as much as 80 percent for one year for EVs that will be registered between October 1 this year and September 30, 2025.
To be able to enjoy tax incentives, the battery cells imported to produce EVs must not exceed 15 percent of the total cost of each unit produced.
In addition, the value of raw materials originating in Thailand or in any country within Southeast Asia, alongside the value of imported battery cells, labor costs, and other costs and profit, must not be lower than 40 percent of the ex-factory prices of the EVs.
With the tax incentive, the government expects the number of EVs on the road to increase by 128,000 units.
The government would also waive the tariff on the local production of battery-powered passenger cars, or those carrying up to 10 people each, such as buses and pick-up trucks, until May 2025. However, such a tax exemption only applies to those produced within the tax-free and free trade areas in industrial estates.
“Both measures are part of the government’s initiatives to make Thailand one of the world’s major production bases for electric vehicles,” the prime minister was quoted as saying.
As compared with traditional vehicles, EVs are more eco-friendly as they do not emit toxic gases that are harmful to the environment.
The government’s move to boost EV production in Thailand successfully lured Chinese carmakers which are now setting foot on the Southeast Asian country, thanks to the ASEAN-China free trade agreement that allowed tariff-free importation of EVs from the People’s Republic.
Great Wall Motor is currently the most popular EV brand, having sold more than 2,000 cars already since its arrival in the market last year and that 3,000 more people are awaiting the arrival of more of its EVs.
SAIC Motor, a company that owns the MG brand, also sold as much as 4,500 EVs in 2021. Analysts expect the said figures to grow even bigger this year.
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