New EV incentives boost investment in Thai automotive sector

The Federation of Thai Industries (FTI) expressed confidence in the transformative potential of the new electric vehicle (EV) incentive packages, anticipating a significant boost to investment in the automotive sector and related businesses. As Thailand strives for sustainable economic growth and enhanced competitiveness, surges in investment are vital, particularly in the targeted S-curve industries encompassing next-generation vehicles.

Surapong Paisitpatanapong, the FTI’s Automotive Industry Club spokesperson and vice-chairman, voiced his approval of the EV Board’s resolution supporting EV manufacturing and its supply chain.

“The incentives come as investors are waiting for new packages after the EV3.5 scheme.”

This scheme, EV3.5, incorporates aspects such as reduced import duties for completely assembled vehicles, subsidies, and a cut in excise tax.

The EV3.5 package earned the Cabinet’s approval in December of the previous year, with aspirations to boost the EV industry’s growth from 2024 to 2027. Unveiled yesterday, the latest package is designed to lure investors by promising government backing for EV manufacturing within the commercial truck and pickup segments, reported Bangkok Post.

Surapong expressed optimism about the new incentives.

“With the new incentives, we believe prospective investors are more likely to decide to invest in Thailand.”

Japanese and Chinese automotive companies operating in Thailand have shown interest in escalating their production within the commercial truck and pickup segments to cater to the burgeoning EV market in the ASEAN region. Moreover, the new incentives are set to profit from electronic parts manufacturers and developers of EV chargers.

The importance of the automotive industry in Thailand is underscored by its contribution to the nation’s GDP at 11%, employing over 750,000 workers. Thailand is recognised as the 10th largest producer of internal combustion engine cars globally, exporting vehicles to a total of 170 nations.

In related news, the Thailand government confirmed that measures have been approved to encourage companies to convert their commercial fleets of large trucks and buses to battery electric vehicles (EVs). This move aims to increase the adoption of EVs and support companies in achieving their net-zero targets.