Old-car trade-in plan stalls as Finance Ministry seeks new clean-energy model

The Finance Ministry has backed away from the old-car trade-in plan after running into problems over the management of end-of-life vehicles and old batteries, amid concerns that the scheme may not work in practice.

The ministry has instructed the Excise Department to quickly study a new project under the 200-billion-baht budget framework to support Thailand’s transition towards clean energy and environmentally friendly vehicles.

Lavaron Sangsnit, Permanent Secretary of the Ministry of Finance, said the ministry had assigned the Excise Department to urgently prepare a proposal for a new project to support the country’s energy transition, replacing the old-car trade-in scheme, which remains stuck over major issues involving the management of old vehicle scraps.

He acknowledged that the main problem lies in the lack of clarity over how old vehicles and old batteries would be disposed of and managed, which could prevent the project from being carried out efficiently in practice.

Lavaron said the original concept required car manufacturers to take back old vehicles and manage them themselves, rather than shifting the burden to the state. If companies are able to sell new cars, they should also be responsible for the old vehicles entering the system, he said.

“If operators do not cooperate, this project will not be easy to implement, because there must be clarity on how old vehicles, including batteries, will be managed,” Lavaron said.

Concern over old vehicles and batteries becoming a state burden

The Finance Ministry believes old vehicles joining the scheme must have a clear management plan, such as:

• Vehicles that are still usable may be exported to third countries.
• Vehicles that are no longer roadworthy must be scrapped properly in line with environmental standards.
• Old batteries must be recycled and disposed of through a safe system.

Without a complete management plan, the state could end up bearing long-term costs and environmental problems.

Excise Department told to find new clean-energy plan

The new approach now being studied by the Excise Department must be more suitable for Thailand’s context and respond more effectively to the transition towards clean energy.

The project will fall under Programme 2 of the emergency decree authorising the Finance Ministry to borrow 400 billion baht, which allocates 200 billion baht for energy restructuring and support for environmentally friendly vehicles.

Lavaron added that several agencies are also studying and proposing new project models. Any project that is ready and can be proposed first will have a chance to be considered first, as the budget is limited.

The Finance Ministry therefore wants all agencies to quickly finalise proposals that are effective and can be implemented in practice as soon as possible.

The shelved plan had originally been viewed as a possible stimulus measure for Thailand’s auto industry, which has faced weak domestic sales, tighter credit conditions and rising competition from electric vehicles. Earlier discussions centred on allowing owners of older vehicles to trade them in for discounts on new cars, while placing responsibility for scrapping and recycling on carmakers. The latest setback shows that any replacement scheme will need to go beyond boosting sales and set clear rules for end-of-life vehicle management, battery recycling and environmental safeguards if it is to support Thailand’s clean-energy transition without creating new long-term costs for the state.