Major incentives on offer as ministry pushes transition to EVs

The committee had earlier sent it at the end of December but the scheduled meeting on January 14 did not happen.

The secretary to the Energy Minister, Kawin Tangsupanich, said to “Bangkokbiz” that the ministry is pushing EV incentives as fast as possible for Cabinet approval.

According to a Government House source, it is expected to be placed before the Cabinet before mid-February.

Among the proposed incentives are:

Pay direct subsidy from 2022 to 2025

1.Cars

Cars with a retail price less than 2 million baht (manufactured and assembled in the country) will receive:

• lower import duty by 40 per cent from 2022 to 2023
• decrease in excise tax from 8 to 2 per cent from 2022 to 2025
• 70,000 baht direct subsidy for cars with 30 kilowatt per hour (kWh) batteries
• 150,000 baht direct subsidy for cars with more than 30kWh batteries

Cars with retail price from 2 million to 7 million baht will receive:

• Decrease in import duty by 20 per cent from 2022 to 2023
• Decrease in excise tax from 8 to 2 per cent from 2022 to 2025
• Manufacturers must make cars to replace the ones that were previously imported. Manufacturers must make one of the models that they import from 2022 to 2023.

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Applicants for the incentives must be car manufacturers in the country who, in 2024, replace the number of imported completely built units (CBU) from 2022 to 2023 in the ratio of one imported vehicle per 1.5 manufactured vehicle.

2. Motorcycles with a retail price of lesser than 150,000 baht will receive direct support of 18,000 baht for completely knocked down (CKD) and CBU motorcycles from 2022 to 2025.

Applicants must be motorcycle manufacturers in the country who manufacture motorcycles in 2024 to replace the number of imported Completely Built Units (CBU) from 2022 to 2023 and might extend to 2025 if it is necessary in the ratio of 1 imported vehicle per 1.5 manufactured vehicle.

Manufacturers must make vehicles from one of the models that they import from 2022 to 2023.

3. Pickup trucks

Pick up trucks with a retail price lesser than 2 million baht will receive the following incentives:

• Zero excise tax from 2022 to 2025
• 150,000 baht direct support from 2022 to 2025 for trucks with more than 30kWh batteries that are manufactured in the country

Application procedure

Manufacturers must send the retail price structure to the Excise Department and they must produce or use batteries that were manufactured or assembled in the country.

They will have to sign a contract with the department for which they will have to present a bank guarantee. The subsidies and tax deduction will be charged with interest, along with the bank guarantee, if they do not follow the conditions. They will also be fined according to the Excise, Customs, and Tariff laws.

MG Sales (Thailand)’s vice president Pongsak Lertrudeewattanavong said that the EV support measures by the government are good because consumers will receive the benefit directly, making EVs more interesting, and push the market to grow.

However, the government should implement it as soon as possible because consumers are waiting for these measures and some might slow down their plans to get cars which will affect the market.

He said the conditions are good because they will create motivation for consumers as there are many EVs under 2 million baht which will receive the support.

He said MG or Ora will be benefitted from the excise tax reduction which will also decrease the car price and push the EV market to grow.

He said Chinese EVs have advantages from the bilateral FTA agreement as import duty is zero per cent. The import duty on Japanese EVs is 20 per cent, 40 per cent on Korean while other countries have to pay 80 per cent. The guidelines will make cars from Japan and Korea enjoy zero import duty.

Pongsak said it is good because consumers will have more choices and Chinese EVs will lose their price advantage. The overall market will grow in the future if there are more products, awareness, and reception.

However, he did not agree with measures for cars with a retail price from 2 million to 7 million baht. To get the incentive, manufacturers must manufacture cars to replace the ones that were imported before. Manufacturers must make one of the models that they have imported.

He said technology is changing quickly so the car might be outdated when they have to manufacture in 2024 or 2025.

Meanwhile, a source from the automotive industry business said the future for EV pickup trucks is not clear because they were not good for heavy, long-range, and long period use.

However, some companies such as Great Wall Motor are interested to make EV pickup trucks.