The electric vehicle industry in Thailand was given a shot in the arm today (Tuesday) when the cabinet decided to exempt from customs duties battery electric vehicles (BEVs), which are locally assembled or produced in a (tax) Free Zone as defined in the law on industrial estates.
The duty exemption is for this year, after the issuance of a regulation on the exemption, until December 31st, 2025. The exemption applies to sedans, passenger cars (which can accommodate up to 10 people) and pickup trucks.
BEVs must meet conditions, such as the value of battery cells imported to produce batteries for installation in the BEVs which, when included in the production cost, must not exceed 15% of the ex-factory prices of the BEVs, to be eligible for the exemption.
The value of the raw materials originating in Thailand and/or in ASEAN member countries, the value of the imported battery cells, labour costs and other costs plus profit, when added together, must not be lower than 40% of the ex-factory prices of the BEVs.
Entities eligible for the exemption must be BEV assembly or manufacturing plants located in a Free Zone.
The exemption for the three plus years will cost the exchequer 36.12 billion baht, which may increase in line with the demand for BEVs, but the benefits from this tax incentive will include a boost for the electric vehicle industry and the prospect of Thailand becoming a regional hub of BEV production and assembly.
The cabinet also agreed to reduce the road tax for EVs for the first year of registration, which will help boost domestic demand for the vehicles.
