The Thailand Board of Investment (BOI) today approved the roll out of a comprehensive set of incentives covering all major aspects of the electric vehicles (EV) supply chain, with a focus on battery electric vehicles (BEVs), local production of critical parts, and the inclusion of commercial vehicles of all sizes as well as ships. The board also approved 35.7 billion baht (USD1.1 billion) worth of large investment projects in several sectors.
“In line with the Government policy to promote electric vehicles across the board, and to answer the radical changes underway in the global car industry, the BOI today approved a package that will accelerate the development of EV production and related supply chain in Thailand, and allow the entire sector to move into higher gear,” Ms Duangjai Asawachintachit, Secretary General of the BOI, said after a board meeting chaired by Prime Minister Gen Prayut Chan-ocha.
New Package for EV
The new promotion package, which replaces the first EV package which expired in 2018, covers a comprehensive range of electrical vehicles, namely passenger cars, buses, trucks, motorcycles, tricycles, and ships. Incentive schemes for these different types of electric vehicles can be summarized as follows:
- Four wheelers: Qualified projects with a total investment package worth at least 5 billion baht will be granted a 3-year tax holidays for PHEVs, but as for BEVs, an 8-year corporate income tax exemption period will be offered and will be extendable in case of R&D investment/expenditures. As for qualified projects with total investment worth less than 5 billion baht, 3-year tax holidays will be granted on PHEVs and BEVs, but the tax holidays period for BEVs can be extended if the project meets the set requirements, such as production commencement by 2022, additional part production, minimum production of 10,000 units within 3 years, and R&D investment/expenditures.
- Motorcycles, three-wheelers, buses and trucks: Qualified projects will be granted 3-year corporate income tax exemption, extendable if meeting additional requirements.
- Electric-powered ship production projects, for vessels with less than 500 gross tonnage, will be eligible for 8 years of corporate income tax exemption.
The BOI also approved to add four more types of EV parts in the list of critical parts, namely high voltage harness, reduction gear, battery cooling system and regenerative braking system. These four categories will all receive 8 years corporate tax exemptions.
To promote local EV battery production, the BOI also approved additional incentives for the production of both battery modules and battery cells for the local market by granting a 90% reduction of import duties for 2 years on raw or essential materials not available locally.
The BOI has previously approved 26 projects producing electric vehicles of various types, including 5 hybrid electric vehicles (HEVs), 6 plug-in hybrid electric vehicles (PHEVs) and 13 BEVs, and 2 E-Bus projects, with a combined production capacity of over 566,000 units per year, BOI data shows. So far, seven of those projects have started commercial operations, namely majors like Nissan, Honda and Toyota for HEVs; Mercedes Benz and BMW for PHEVs; and new comers FOMM and Takano for BEVs. The agency also approved 14 projects to make critical parts for EVs, including 10 battery production projects.