Thai Government Sets 2026 Deadline For Local Assembly Of Essential EV Parts

Photo: The Bangkok Post. As reported by the Bangkok Post, automakers who profit from the Thai government's EV promotion initiatives will have to commit to investing in domestic production of essential EV components by 2026.

Electric motors, reducers, and inverters—the three vital parts that make an EV function—need to be assembled locally, according to Ekniti Nitithanprapas, director-general of the nation's excise department. Companies need to manufacture EVs domestically to balance the amount of EVs imported, in keeping with the country's efforts to ramp up local EV assembly. Manufacturers are required to generate 100% of their EV sales domestically in the first year. They will have to produce 1.5 times as much as their EV sales if they don't reach this goal in the second year.

This comes after Thailand’s first phase (3.0) and second phase (3.5) of EV promotion measures were introduced. One of the requirements for these measures' provision is the establishment of production bases and the domestic manufacture of EVs.
According to Ekniti, this requirement forces automakers to set up production facilities in Thailand, resulting in new business ventures and investments. With a total investment value of more than 80 billion baht made thus far, participating automakers have progressively established production bases in Thailand.

The director-general did, however, also point out that during the first 11 months of the 2024 fiscal year, vehicle tax revenue fell by 30%. This decline is a result of lower sales and production as well as the excise tax breaks for electric vehicles (EVs).
The Thai government is also offering financial incentives to encourage the production of EV batteries. While investments made at the pack level are exempt for five years, those made at the module level are eligible for an eight-year corporate income tax exemption.

Cell-level investments benefit from eight-year tax exemptions as well as fund subsidies, even though the EV promotion fund does not subsidize these levels.