Thailand Extends BEV Production Deadlines Amid Automotive Industry Struggles

Extension of BEV Production Deadlines in Response to Industry Challenges
Thailand‘s National Electric Vehicle Policy Board has announced an extension for battery electric vehicle (BEV) manufacturers to meet their production commitments. This decision comes after the country’s automotive sector faced difficulties including reduced production outputs. The extension was confirmed by the Board of Investment (BOI), reflecting the need for more time to navigate these challenges and ensure production targets are met.

Updated Production Targets and Subsidy Revisions
Under Thailand’s EV 3.0 promotion measures, BEV manufacturers who received subsidies were originally required to produce one BEV for every vehicle they imported during 2022-2023. With the revised EV 3.5 guidelines, manufacturers will now need to produce 1½ BEVs by 2025 for each imported vehicle. However, any unfulfilled production commitments from 2023 will not qualify for retroactive subsidies but must be addressed under the new EV 3.5 rules before future subsidies can be applied. This adjustment aims to maintain momentum in Thailand’s transition to electric mobility while addressing any gaps in production due to market conditions.

Broader Impact on Thailand’s Auto Industry and EV Growth
This extension and the revised production targets come in the context of broader struggles in Thailand’s automotive sector. The Federation of Thai Industries (FTI) has revised down its 2024 auto production forecast, lowering it from 1.9 million units to 1.5 million. Data from January to October 2023 reveals a 19% decline in production compared to the previous year, with drops in both domestic sales and exports. Despite these setbacks, the production of electric vehicles—particularly battery electric, hybrid, and plug-in hybrid vehicles—has been a bright spot, demonstrating the potential for growth in the electric vehicle market despite broader economic difficulties.

Government Measures to Stimulate Investment in EV Sector
In an effort to further encourage investment in the EV sector, the BOI has also approved a temporary reduction in the excise tax rate for hybrid vehicles from 2028 to 2032. This measure is expected to stimulate approximately 50 billion baht ($1.4 billion) in new investments, contingent upon manufacturers meeting CO2 emissions standards and investing in local production capabilities. The initiative is seen as a critical step to support Thailand’s goal of transitioning to greener mobility while addressing production challenges and attracting long-term investments into the EV sector.