Amid growing concerns over the impact of lower-cost vehicle imports on domestic manufacturing, a coalition of 10 automotive associations representing more than 1,500 operators in Thailand is preparing to urge the government to raise the excise tax on fully imported electric vehicles to at least 32%, with the stated objective of supporting local vehicle production and domestic auto-parts suppliers in response to lower-cost Chinese imports.

The Electric Vehicle Association of Thailand (EVAT), the Thai Auto-Parts Manufacturers Association (TAPMA) and allied industry groups are scheduled to submit emergency proposals to the government on May 14th, focusing primarily on Chinese carmakers and covering both imported EVs and vehicles assembled in Thailand.

Industry concerns over sector impact

The coalition stated that Thailand's automotive industry is facing challenges during the transition towards electric vehicles. According to the group, the rapid EV transition, combined with the cost advantage of imported vehicles from China, could affect local production and Thai auto-parts manufacturers. The associations stated that producing vehicles in Thailand costs approximately 30-40% more than importing them from China, placing local manufacturers and parts suppliers at a cost disadvantage.

Proposal for 32% tax on fully imported EVs

A central proposal involves restructuring the excise tax framework for electric vehicles.

The associations are seeking an increase in the excise tax on fully built-up imported EVs, or CBU EVs, to at least 32%. This would create a 30-percentage-point difference compared with domestically produced EVs, which are currently subject to a 2% excise tax. According to the group, the higher tax rate would reduce the cost gap between local manufacturing and imports, while supporting continued investment in vehicle production within Thailand.

Concerns over increased vehicle imports

The associations also expressed concern that, once the EV 3.5 support scheme concludes, carmakers with manufacturing operations in China may resume importing fully built-up vehicles instead of producing them in Thailand. The group stated that, without replacement measures, some automakers could reduce or discontinue local production operations. According to the associations, such a development would affect Thailand's automotive supply chain, particularly local parts manufacturers that depend on orders from vehicle producers.

Import quota linked to local production

The coalition has also proposed an import quota system tied directly to domestic production levels. Under the proposal, companies making vehicle production investments in Thailand would be permitted to import CBU EVs at the existing lower excise tax rate of 10%.

However, the quota would be limited to no more than 10% of each company's production volume. The stated objective is to prevent companies from relying primarily on imports while continuing to receive tax incentives intended for Thailand's EV industry.

Proposal for stricter local content requirements

The industry groups are also seeking stricter local content requirements. The proposal calls for locally sourced parts to account for at least 80% of a vehicle's value, alongside a revised calculation method intended to address existing loopholes. According to the coalition, the current system should be revised to prevent profits or labour costs from being calculated in ways that reduce support for Thai parts manufacturers.

Proposals scheduled for submission on May 14th

EVAT, TAPMA and their partner associations are scheduled to hold a press conference and submit their proposals to the government on May 14th. The move is expected to increase policy discussion regarding Thailand's EV promotion strategy and domestic manufacturing, employment and the country's auto-parts supply chain.