The Thai government has announced a new memorandum of understanding (MoU) with electric vehicle (EV) manufacturer GWM, which will see the government offer generous subsidies and tax relief for EV purchases.
Under the terms of the MoU, the Thai government will provide a subsidy of 70,000 to 150,000 baht (approximately $2,165-4,638) per EV purchased depending on battery size, together with additional value-added tax (VAT) reduction privileges.
GWM has said it is ready to pledge full cooperation in the adoption of pure EV cars across the nation.
The same week, Mitsubishi Thailand announced it will stop producing petrol and diesel-powered vehicles by 2024. Eiichi Koito, president and CEO of Mitsubishi Motors Thailand, said on Friday that the company aims to move to a full EV lineup by then, beginning with PHEVs (plugin hybrid electric vehicles).
Last month, the Thai government gave the go-ahead for a package of incentives, including tax reductions and subsidies, to encourage a move to electric vehicles in the country, which is Southeast Asia’s major auto manufacturing center.
For ready-built electric automobiles worth up to 2 million baht (about $61,538) in import duties this year and next will be reduced by as much as 40%, and 20% for those priced between 2 million and 7 million baht ($192,115).
The Thai government will also lower import excise taxes for electric automobiles from 8% to 2%.
In a recent briefing, spokesperson for the country’s Excise Department Nattakorn Utensut said that the government has now set up guidelines to ensure buyers benefit from tax reductions and support funds.
According to Utensut, manufacturers must first declare the exact price structure, import cost, management fee, and discount for buyers to the department for approval.
The department has also ordered carmakers not to release “minor changes” involving equipment and function systems for car models for two years, so that there won’t be any increase in EV prices.
The subsidies and tax breaks are part of the Thai government’s wider move to promote the use of EVs in the country, aligned with the 2022-2025 plan that includes a zero-emission vehicle goal, as well as a policy to ensure that 30% of Thailand’s overall automobile production is made up of EVs by 2030.
In addition to the subsidies and tax breaks, the Thai government has also pledged to invest in charging infrastructure and to provide training for EV technicians.
Last year, Foxconn and national oil supplier PTT announced they would invest $1-2 billion in a joint venture to manufacture electric vehicles in Thailand. The plant, which is expected to come online by 2023, will have a production capacity of 50,000 units by 2023 and 150,000 by 2030.