According to a Reuters report on March 10, Thailand's Deputy Finance Minister, Paopoom Rojanasakul, announced that Thailand plans to introduce tax incentives for the production of plug-in hybrid vehicles. If approved, the policy will take effect in 2026.
Paopoom Rojanasakul stated that under this plan, tax rates will be determined based on the vehicle's driving range per charge-the longer the range, the lower the tax rate. He added that the proposal will be submitted to the Thai cabinet in April.
Thailand is Southeast Asia's largest automobile manufacturing hub and serves as an export base for global automotive giants such as Toyota and Honda. However, the Thai auto industry is currently experiencing a downturn. Last year, Thailand's automobile production declined by 10% year-on-year, reaching its lowest level in four years. Domestic car sales and exports also fell by 26% and 8.8%, respectively.
Chinese electric vehicle manufacturers, including BYD and Great Wall Motors, have invested over $3 billion in building factories in Thailand. Their aggressive discount strategies have intensified competition for Thailand's domestic automakers. Given that the auto industry contributes 10% to Thailand's GDP, local industry leaders are looking to revive domestic car sales amid economic challenges and competition from Chinese EV manufacturers.
Last month, Reuters reported that Japanese automakers, including Toyota, have been in discussions with the Thai government regarding a vehicle trade-in program aimed at revitalizing the automotive sector and reducing emissions from older, high-carbon vehicles. Paopoom Rojanasakul also revealed that the Ministry of Finance plans to introduce a credit guarantee system for pickup truck buyers, with these measures expected to be implemented before Thailand's annual auto show at the end of March.
Sompol Tanadumrongsak, Chairman of the Thai Auto Parts Manufacturers Association, stated, "Automakers are actively promoting trade-in and scrappage programs because they want to boost new car sales." He noted that vehicles eligible for scrappage must be at least 10 years old. Thai officials have indicated that the trade-in and scrappage program will allow consumers to receive discounts when exchanging their old cars for new ones, with the replaced vehicles being permanently scrapped.
