Thailand unveils new tax breaks for EV manufacturers

Thailand has approved new incentives for electric cars, buses, trucks, motorcycles and ships to promote local production of electric vehicles and its supply chain.

Thailand unveils new tax breaks

The Southeast Asian Country’s new packaged is approved by the nation’s Board of Investment chaired by Prime Minister Prayuth Chan-Ocha. It includes 3 years of tax exemption for manufacturers of plug-in hybrid vehicles and an eight-year corporate income tax waiver for battery electric vehicle makers.

Duangjai Asawachintachit, the board’s secretary-general, said in a statement that “will accelerate the development of EV production and related supply chain in Thailand, and allow the entire sector to move into a higher gear.”

Thailand is already a Southeast Asia’s car production hub and now wants to become a centre for battery-powered vehicles. According to BNEF, the country’s combination of policies and incentives are the most advanced in the region.

Here are the key details:

• Four-wheel vehicle manufacturers must invest a minimum of 5 billion baht ($161 million) to be eligible for the tax breaks
• Those investing less than 5 billion baht will get a three-year tax holiday
• Companies investing to produce motorcycles, three-wheelers, buses and trucks will be entitled to a three-year corporate income tax exemption
• Manufacturers of electric-powered ships with less than 500 gross tonnages will get an eight-year corporate income tax waiver
• For critical parts including high-voltage harness, reduction gear, battery cooling system and regenerative braking system, projects will receive an eight-year corporate tax exemption
• Projects for the production of battery modules and cells for the local market will get a 90% reduction in import duties for two years on raw or essential materials not available in Thailand.

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