Thailand's Excise Department has outlined a process for recovering EV subsidies from manufacturers and importers that fail to meet domestic production requirements.

Meeting targets

The Excise Department has outlined how it will deal with EV subsidy recipients that fail to meet domestic production requirements. Under the new rule, participating companies must produce EVs domestically to compensate for completely built-up (CBU) vehicles imported under the scheme. If these companies fail to meet the required domestic production ratio, the Excise Department can recover the subsidies provided. The amount to be recovered will depend on the number of vehicles for which the production requirement was not fulfilled.

The government introduced its EV 3.0 and EV 3.5 programmes as part of its EV policy. Under EV 3.0, eligible passenger EVs with batteries of at least 30 kWh could receive subsidies of THB 150,000 (US$ 4,470) per vehicle. Participating companies could import eligible CBU EVs but were required to offset those imports through domestic production at prescribed ratios.

The government has clarified how subsidies and related liabilities may be recovered when production requirements are not met.

Potential liabilities include:

Recovery of subsidies on a per-vehicle basis for vehicles where the domestic production requirement has not been met.
Interest of 7.5% per year, calculated without compounding.
Excise tax liabilities, surcharges, additional amounts or related fines may also apply.

The government stated that consumers who purchased EVs will not be required to repay the subsidies. The recovery of subsidies will be directed at manufacturers that fail to meet the scheme's conditions.

According to the Thai government, each case will be assessed individually after the Excise Department verifies the facts, vehicle numbers and compliance with the scheme's conditions. If non-compliance is confirmed, an administrative order may then be issued, with the recipient given the right and a timeframe to appeal or contest it. The government said the process is intended to recover public funds and provide clarity on the requirements for businesses operating under the scheme.

The government stated that cases would be considered individually and that companies would not be presumed to have breached the rules before the review process was completed.

Thailand's EV policies

In September, the National Electric Vehicle Policy Committee (EV Board) approved in principle a restructuring of EV excise tax rates linked to investment, domestic production, local component use and value creation in Thailand.

The proposed structure would apply different tax treatment according to investment, production and value creation in Thailand, including the use of locally produced components.

Imported EVs from companies without production facilities in Thailand would face a higher tax rate. Manufacturers with production facilities in Thailand may be permitted to import limited numbers of certain models for market testing, with the applicable treatment linked to the economic value they generate in Thailand.