Thailand plans new PHEV tax incentives to boost local manufacturing, ease buyers into electrification

With plug-in hybrids seemingly seeing a resurgence, particularly among Chinese carmakers, Thailand is now in the midst of preparing new incentives for those cars. According to Bangkok Post, the country’s finance ministry is set to submit a proposal to the cabinet by next month, with deputy minister Paopoom Rojanasakul saying they are slated take effect on January 1, 2026.

Key to the “support measures” is the fact that the PHEV tax rate will be separate from that for pure electric vehicles and will be based on electric range, not carbon emissions. Vehicles that can travel further on a single charge will be taxed less than those with a shorter range; this is similar to the current system whereby cars that can travel over 80 km on electric power have a five per cent tax rate, and those below the threshold are taxed at ten per cent.

The new measures will also remove the current 45-litre fuel tank restriction – helping Chinese models that use a larger tank to help achieve total range figures in excess of 1,000 km. The recently-launched Jaecoo J7 PHEV, for instance, has a 60-litre tank for a claimed combined range of 1,300 km.

Paopoom opined that subsidising PHEVs is a suitable approach to sustain Thailand’s automotive manufacturing industry – traditionally centred around the internal combustion engine – and ease the transition to full EVs. “We must support hybrid vehicles that combine internal combustion engines and EV technology, which means PHEVs, during this transition phase towards full EV adoption in the future,” he said.

He also said the excise department is revising the battery tax structure, with a flat rate of eight per cent currently being applied regardless of battery type or charging capacity. The new tiered tax structure, he added, will impose a lower tax on batteries with a longer life cycle per charge and higher energy density.

Separately, Paopoom said that starting next year, companies currently importing EVs that have benefitted from government incentives will be required to produce EVs domestically as compensation, in order to continue receiving the said incentives. It’s estimated that around 100,000 EVs will be locally produced in 2026 as part of this “offset requirement,” the report stated.=

The post Thailand plans new PHEV tax incentives to boost local manufacturing, ease buyers into electrification appeared first on Paul Tan's Automotive News.