Thailand approves 35% excise tax on fully imported EVs from January

Thailand’s cabinet has approved an increase in excise tax on fully imported battery-electric vehicles to 35% from 10%, effective from January 2027, Finance Minister Ekniti Nitithanprapas said on Tuesday.

The decision, announced on 3 November, also raises excise tax on imported range-extended electric vehicles to 35% from 15%. Ekniti said the changes were intended to encourage investment and local production, supporting Thailand’s role as a vehicle manufacturing and export base.

The increases come as the government seeks to retain manufacturers that employ Thai workers while responding to pressure from domestic automotive industry groups over competition from cheaper Chinese imports.

Higher rates target fully imported vehicles

The approved battery-electric vehicle rate represents a rise of 25 percentage points. The increase for imported range-extended vehicles is 20 percentage points, bringing both categories to the same 35% rate.

For buyers and automotive businesses, the central distinction in the announcement is the focus on fully imported vehicles, rather than electric vehicles as a whole. The decision reported on Tuesday does not establish the final excise rates for locally manufactured or locally assembled models.

The levy is an excise tax, distinct from an import tariff. In an interview with Bloomberg Television reported by Just Auto while the policy was still under discussion, Ekniti said Thailand’s free-trade obligations constrained direct tariff changes, leaving excise taxation as the government’s main mechanism for supporting manufacturers based in the country.

From a proposed 30% rate to cabinet approval

During those discussions, Ekniti had indicated that the rate for fully imported EVs could be around 30%, with authorities working with the automotive industry on a final figure. Tuesday’s cabinet announcement sets that rate at 35%.

The earlier proposal followed provisional approval by Thailand’s EV policy board of a three-tier excise structure. That framework envisaged the highest rate for fully imported vehicles, the lowest for vehicles made entirely in Thailand, and an intermediate rate for locally assembled vehicles using imported components.

Ekniti also said some carmakers importing vehicles from China and Europe had begun talks with the government about establishing Thai manufacturing operations to qualify for lower rates, according to Just Auto’s account of the interview.

Manufacturing investment drives policy shift

Thailand is a major regional automotive production centre, with manufacturers including BYD and Toyota. Its EV support policies have combined tax breaks and price subsidies to attract investment, including from Chinese companies BYD and Great Wall Motor.

According to the Board of Investment, cumulative investment approvals across the electric vehicle ecosystem reached $4.59 billion across 189 projects by August 2026.

Industry pressure has nevertheless grown. In May, Thai automotive groups warned that the sector faced a crisis without changes to EV policy, saying local manufacturers were struggling to compete with cheaper imports from China.

Meanwhile, EVs, hybrids and plug-in hybrids together accounted for 55% of Thailand’s new-car registrations during the first seven months of 2026, overtaking combustion-engine vehicles for the first time, according to the board. The January tax changes place greater emphasis on securing local production as that market develops.