Thailand is one of the leading automotive producers in Southeast Asia, and it has been pursuing a strategy to become a regional hub for electric vehicles (EVs) in the past few years. The Thai government has implemented various policies and incentives to promote EV production and consumption, such as tax reductions, duty exemptions, and subsidies. However, due to the impact of the COVID-19 pandemic and the rising demand for EVs, the government has recently announced a new, scaled-down subsidy scheme for EV buyers that will run from 2024 to 2027.
The new subsidy scheme, dubbed “EV3.5”, is aimed at supporting the domestic production of battery electric vehicles (BEVs), which are powered solely by electricity and do not have an internal combustion engine. The scheme will offer subsidies worth up to THB 100,000 (US$ 2,800) for each BEV purchase, depending on the battery size and the suggested retail price (SRP) of the vehicle. The subsidies will be granted to both imported and locally produced BEVs, but only if they are manufactured in Thailand.
The new scheme is a revision of the previous “EV3” scheme, which was approved in February 2022 and offered subsidies ranging from THB 50,000 to THB 200,000 for BEVs, plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). The EV3 scheme was supposed to run from 2022 to 2025, but it was suspended in November 2022 due to the budget constraints caused by the pandemic. The EV3.5 scheme is expected to resume the EV promotion policy with a more focused and realistic approach.
According to the government, the new scheme is designed to align with the global trend of shifting to BEVs, which are considered more environmentally friendly and energy efficient than PHEVs and HEVs. The scheme is also intended to stimulate the domestic demand for BEVs, which is still low compared to other countries in the region. According to the Electric Vehicle Association of Thailand (EVAT), the sales of BEVs in Thailand accounted for only 0.4% of the total car sales in 2022, while the sales of PHEVs and HEVs were 1.6% and 9.8%, respectively.
The government hopes that the new scheme will help increase the sales of BEVs to 30% of the total car sales by 2030, which is the target set by the National Electric Vehicle Policy Committee (NEVPC). The NEVPC is a high-level body chaired by the prime minister that oversees the development and implementation of the EV policy in Thailand. The NEVPC also aims to make Thailand an EV manufacturing hub in Asia, with a production capacity of 1.05 million units by 2030.
The new scheme has received mixed reactions from the industry and the public. Some stakeholders have welcomed the scheme as a positive step to support the transition to BEVs and to boost the local EV industry. Others have criticized the scheme as too limited and insufficient to attract more consumers to switch to BEVs, especially given the high cost and the lack of charging infrastructure in the country. Some have also questioned the effectiveness and transparency of the scheme, as well as the impact on the environment and the economy.