Thailand plans 30% excise tax on fully imported EVs from 2027

Thailand’s Finance Ministry is preparing to propose an excise tax increase on fully imported electric vehicles to at least 30%, with the new rate expected to take effect on January 1, 2027, according to a ministry source.

The proposal, expected to be submitted to the Cabinet within two weeks, would target completely built-up electric vehicles imported without locally produced components.

The source said the measure is intended to protect manufacturers that have invested in factories and supply chains in Thailand while encouraging brands still relying on imports to establish production facilities in the country.

Electric-powered passenger vehicles that do not qualify for preferential treatment are currently subject to a 10% excise rate. Vehicles meeting specified conditions can qualify for a reduced 2% rate.

Under the proposed change, the source said the highest rate for fully imported EVs would rise to at least 30%.

Imported EV prices expected to rise

The higher tax would make fully imported EVs more expensive for purchases from January 1, 2027, according to the source.

For example, an imported EV valued at THB1 million that is currently subject to a 10% excise rate would incur about THB100,000 in excise tax. A rate of 30% or more would substantially increase the tax burden and could lift the vehicle’s retail price by at least THB200,000, depending on the final structure and how manufacturers price their vehicles.

Consumers seeking fully imported EVs under the current tax structure could therefore have an incentive to complete purchases before the end of 2026.

The proposed change would not target EVs produced domestically under qualifying conditions, according to the source.

Tax policy shifts from imports to local production

Thailand began introducing major EV incentives several years ago under the EV 3.0 and EV 3.5 programmes, initially allowing imports while requiring participating manufacturers to compensate with domestic production.

Under EV 3.5, manufacturers importing vehicles under the programme are required to produce two locally made vehicles for every imported vehicle in 2026, rising to three for every imported vehicle in 2027.

The policy helped accelerate EV investment and establish Thailand as a regional production base.

The National Electric Vehicle Policy Committee agreed in principle in September to overhaul vehicle excise taxation around five principles, including local investment, high-value domestic content and a level playing field for manufacturers.

The Board of Investment said the new framework would link excise rates directly to the economic value generated in Thailand through investment, local assembly, domestic supply-chain integration and skilled employment.

Local content to carry greater weight

The Finance Ministry source said the tax overhaul would also change how local content is assessed.

Rather than relying heavily on factors such as profits, labour costs and electricity expenses, the new approach would place greater emphasis on high-technology components produced in Thailand.

The source described a structure in which manufacturers with domestic factories and extensive use of Thai-made components would receive the lowest tax treatment.

Companies assembling vehicles locally but still relying heavily on imported parts would face a middle rate, while fully imported vehicles from manufacturers without Thai production would face the highest tax.

Separately, existing Board of Investment incentives already require Made in Thailand certification for companies seeking additional local-content benefits.

For battery electric vehicles, the BOI sets a minimum local-content requirement of 40%, while plug-in hybrid vehicles require 45%.

Future taxes to focus on emissions and local value

The source said Thailand’s longer-term approach to automotive excise tax would increasingly avoid favouring one propulsion technology over another.

Instead, carbon dioxide emissions and the economic value created domestically would become more important criteria.

Vehicles producing lower emissions would qualify for lower tax rates, regardless of whether they use battery-electric, range-extended electric or hybrid technology.

The government hopes the approach will encourage cleaner vehicles while avoiding a tax structure that gives imported models a cost advantage over companies that have invested heavily in Thai factories, workers and parts suppliers.

The BOI said in September that electric and hybrid vehicles had reached 55% of Thailand’s new-car market in the first seven months of 2026, prompting a broader review of automotive taxation as the country seeks to remain a major multi-technology production hub.

Government seeks to protect automotive production base

The Finance Ministry source rejected suggestions that the proposed tax increase was designed specifically to favour Japanese carmakers.

Instead, the source described it as the next stage of a longer-term strategy that began with attracting EV investment, followed by developing local supply chains and increasing requirements for domestic production and components.

Thailand is seeking to ensure that growing EV sales translate into manufacturing investment, technology transfer and jobs rather than relying primarily on imported finished vehicles.

“The excise tax restructuring is an important step towards genuine vehicle production under the Made in Thailand standard,” the source said, adding that the policy was intended to preserve confidence in Thailand as a leading regional automotive manufacturing hub.

Source: Thansettakij