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Tax incentives to boost EV market ‘must not affect other manufacturers’

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Automobile tax adjustments to turn Thailand into a manufacturing base for electric vehicles (EVs) should not affect the production of other vehicles like pick-up trucks, a source from the Excise Department said this week.

“The department is considering the new structure and accepting input from related parties, especially in the manufacturing sector,” the source said.

The current automobile tax is based largely on the emission of carbon dioxide – vehicles emitting the least CO2 are taxed lowest.

“If the new tax structure only offers tax breaks to manufacturers of BEV or battery electric vehicles to attract investment, manufacturers of internal combustion vehicles may move out of Thailand, as the need for vehicles running on fossil fuel is still high, especially in nations that lack the infrastructure for electric vehicles, like African countries,” the source added.

The source also pointed out that Thailand is one of the world’s key manufacturers of one-tonne trucks, which cannot be replaced by an electric alternative as petrol-fuelled trucks are most suitable for heavy loads and long-distance travel.

“Electric vehicles are bound to the availability of charging stations and are not meant for long-distance travel. If Thailand were to become a manufacturing hub for EVs, it should only focus on sedans or personal vehicles,” the source said.

The Excise Department is also considering non-tax incentives to promote the manufacturing of BEV, as well as revising the tax structure for completely knocked down (CKD) and completely built-up (CBU) electric vehicles to promote sales in the country.

In March, the National Electric Vehicle Policy Committee under the Energy Ministry set the target of devoting 50 per cent of the country’s total manufacturing capacity to electric vehicles by 2027, with at least 1.05 million EVs on the roads by 2025 and 15.58 million by 2035.

Published : June 10, 2021

By : THE NATION