Thai auto groups urge EV rescue plan before 2027 production cliff

Ten Thai automotive associations have urged the government to introduce urgent measures to protect Thailand’s vehicle production base, warning that the country’s shift towards electric vehicles could damage local manufacturers and parts suppliers if policy support is not strengthened before 2027.

The Electric Vehicle Association of Thailand (EVAT), together with nine other Thai associations linked to the automotive and parts industries, signed a joint statement on Thursday, setting out eight emergency policy proposals for the government. The coalition said the measures were needed to stabilise an industry that remains one of the pillars of Thailand’s economy. The associations together represent more than 1,500 operators.

The signing ceremony was held at the Thai Subcon Activity Zone at Bitec Bangna. Participants included Sompol Thanadumrongsak, president of the Thai Auto-Parts Manufacturers Association; Chanin Khaochan, president of the Thai Subcontracting Promotion Association; Pornpisit Nitisuparat from the Thai Printed Circuit Association; Chatchai Phonmool, vice-president of the Thai Automation and Robotics Association; Oranong Jaiyen, president of the Thai Composites Association; Wiroj Siritanasart, president of the Thai Tool and Die Industry Association; Associate Professor Wirul Sririrak, president of the Thai Embedded Systems Association; Dr Natthanai Kunanusont, vice-president of the Thailand Energy Storage Technology Association; and Nithipoom Pongkriangyos, vice-president of the Thai Foundry Association.

The group said Thailand’s automotive industry is facing its most serious crisis as the market moves from internal combustion engine vehicles to EVs. One major concern is that some carmakers are shifting towards importing fully built electric vehicles, or CBU units, from China under 0% tariff privileges instead of producing vehicles in Thailand.

That trend, the associations warned, is already hurting Thai parts manufacturers, who are losing orders and facing pressure across the supply chain. The bigger risk, they said, could arrive in 2027, when the EV 3.5 support scheme is due to end. Without replacement measures, carmakers may no longer face domestic compensation-production obligations or receive state subsidies, making it more attractive for them to import vehicles from China rather than continue local production.

The latest statement follows an earlier Nation Thailand report on May 12 that the same coalition was preparing to ask the government to raise excise tax on fully imported EVs to at least 32%. That proposal was designed to create a 30-percentage-point gap with domestically produced EVs, which are currently subject to a 2% excise tax. The group also warned that producing EVs in Thailand costs around 30-40% more than importing them from China.

The 10 associations said the government must decide whether Thailand will become merely a consumer market for cheap EVs or remain a stable global production base. They also asked to meet the prime minister urgently to explain the details of their proposals and discuss a way forward.

Their first proposal calls for reform of the excise tax system to create a clearer difference between imported vehicles and vehicles made in Thailand. They also proposed a “real investment for import quota” system, under which local production, investment in public charging stations, research and development centres, and battery recycling facilities could be counted in exchange for import quotas at lower tax rates.

The second proposal focuses on free-zone rules and local-content requirements. The associations said the current 40% local value-added threshold may be sufficient, but the calculation method should be tightened to reflect real domestic value. They also called for tougher checks and a stronger requirement for Thai material content, so that local parts and production are genuinely used.

The third proposal urges carmakers to use more “common parts” that can be shared between EVs and internal combustion vehicles. The group said tax privileges should be linked to the use of locally made high-value parts, especially chassis and body components that Thai manufacturers already have the capacity to produce.

The fourth proposal calls for the Board of Investment to adjust its investment-promotion policy to better protect Thai operators. The associations said investment incentives should be closed in sectors where local manufacturers already have sufficient capacity, unless the project is a joint venture in which Thai shareholders hold at least 40%. They also called for stricter post-approval inspections of labour and machinery, with BOI certificates revoked if companies fail to meet their conditions.

The fifth proposal seeks action on raw-material costs. The coalition urged the government to hold government-to-government talks on upstream raw-material quotas and prices, while also controlling exports of valuable metal scrap.

The sixth proposal calls for stronger certificate-of-origin checks, with traceability down to at least Tier 3 suppliers. The aim is to prevent misuse of origin privileges and protect Thailand’s export reputation.

The seventh proposal focuses on technology transfer. The associations want clear and measurable key performance indicators, as well as open interfaces that allow Thai software developers to participate in EV technology development.

The eighth proposal calls for more domestic testing and stronger safety standards for advanced driver-assistance systems, or ADAS. The group said such technology should be tested and tuned in Thailand to suit local driving conditions, while Thai laboratories should be given a larger role to support higher-level knowledge transfer.

Suroj Sangsnit, president of EVAT, said the proposals were not intended to block imported EVs, push prices up unnecessarily or harm consumers. Instead, he said, the aim was to make competition fairer between companies that genuinely invest, produce, use local parts and build supply chains in Thailand, and companies that mainly import finished vehicles without creating clear domestic value.

The industry’s concern has been building for months. In November 2025, Nation Thailand reported that the EV Board had approved adjustments to the EV3 and EV3.5 incentive schemes, including more flexibility for operators, changes to subsidy-payment terms and measures to reduce oversupply. The revisions also allowed EV3 participants to use factories under the EV3.5 scheme for compensation production, while export incentives were adjusted so that each exported vehicle could count as 1.5 vehicles produced for compensation.

The sensitivity of compensation production became clearer in the Neta case. Nation Thailand reported in January that Neta had imported 16,300 EVs under the EV 3.0 scheme and received more than 2 billion baht in state subsidies, but still had 24,000 compensation-production units outstanding after producing only 4,700 vehicles. If production is terminated, the company could be required to return subsidies and excise tax benefits, together with penalties and surcharges.

At the same time, consumer demand for EVs has continued to rise. Nation Thailand reported that the 47th Bangkok International Motor Show closed with a record 132,951 car bookings, with SCB EIC saying the Thai market had clearly shifted towards EVs. Chinese brands captured 65% of bookings, but the research house warned that the bigger challenge was whether Thailand could convert rising EV demand into domestic economic value instead of relying increasingly on imported vehicles.

The World Bank has also pointed to Thailand’s existing industrial base as a reason not to abandon local manufacturing. Nation Thailand reported in February that more than 80% of auto-parts sales in Thailand could continue to be used in EVs, either unchanged or with limited modification, suggesting that the transition could preserve jobs if the supply chain is upgraded properly.

For the 10 associations, the message is that Thailand still has the capacity, suppliers and skills to compete in the EV era, but policy must move faster. Without clearer tax rules, stronger local-content checks, genuine technology transfer and fairer competition, they warn, Thailand risks watching its long-established automotive supply chain weaken just as the global car industry enters its next chapter.