Benefits of Starting Electric Vehicle Business in Thailand

by Konrad Legal Company Limited Company Registration in Thailand

Why the EV Industry? This is because the Electric Vehicle Industry witnessed a growth of 311% in 2023, and, it is expanding rapidly.

Owing to the pool of benefits for Foreign Investors in Thailand from the Board of Investment in the form of Investment Promotions, the EV industry is attracting a high volume of FDI. The EV Industry landscape is now not only a local Thai playground but, has upscaled itself to be a global arena of investment.

Electric Vehicle Association of Thailand on the EV Industry

In a comprehensive report, the Electric Vehicle Association of Thailand (EVAT) has highlighted the remarkable expansion and promising outlook of electric mobility within Thailand.

The remarkable growth of Battery Electric Vehicles (BEVs) continued into 2023, with a significant surge in new registrations for electric cars. A total of 76,366 electric cars were registered, a substantial leap from the mere 9,678 units recorded in the previous year. Notably, overall new registrations for all types of EVs skyrocketed to an impressive 100,219 units, representing an exponential growth of 380% when compared to the 20,816 units registered in 2022.

Approval from the National Vehicle Electric Board of Thailand

Under the leadership of Mr. Srettha Thavisin, the Prime Minister, the National Electric Vehicle Policy Board (EV Board) convened a meeting to continue driving Thailand's transformation into a leading regional center for Electric Vehicle (EV) production. This initiative is fully aligned with the government's 30@30 strategy. The ambitious goal is for Thailand to produce Zero Emission Vehicles (ZEVs) constituting at least 30% of its total motor vehicle output by 2030. In terms of numbers, this equates to manufacturing 725,000 cars and 675,000 motorcycles.

The EV Board has given its approval to the second phase of the EV Package, dubbed EV 3.5, which will run for four years (2024-2027). This phase aims to foster ongoing growth in the EV industry and attract investments in EV manufacturing in Thailand, particularly from new players. The package encompasses support for investments across the entire EV industry ecosystem. Companies that previously participated in EV 3 are eligible to apply for these measures, provided they meet the stipulated conditions and regulations.

Additionally, the EV 3.5 package introduces additional incentives for electrical passenger cars. Cars priced up to US$ 200,000 will receive an excise tax reduction from 8% to 2%. Additionally, electrical passenger cars priced up to US$ 58,000 and imported as Completely Built-Up Units (CBUs) during the first two years (2024-2025) will benefit from an additional reduction in import duties of up to 40%.

Companies applying for this package will be subject to the condition that by 2026, EV production must domestically offset imported CBU vehicles at a ratio of 1:2, increasing to a ratio of 1:3 by 2027.

For both imported and domestically manufactured electric cars, the batteries must comply with Industrial Product Standards (TIS) and pass testing based on international standards at the Automotive and Tire Testing National Center (ATTRIC).

Therefore, the strong inclination of the Royal Thai government towards this transformation from fossil fuel vehicles to electric vehicles is clearly evident. Subsidizing purchases of electric vehicles is a great initiative to encourage citizens to select EVs during their next vehicle purchase. Isn't this creating a great ecosystem for EV business aspirants?

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What does the Board of Investment of Thailand have for the EV Industry?

The EV 3.5 package underscores the Thai government's steadfast dedication to establishing Thailand as a leading hub for electric vehicles in the region. This strategic initiative aims to attract new players to set up production facilities and encourages existing investors to pivot towards the electric vehicle industry. These endeavors will contribute to the sustainable growth of Thailand's automotive manufacturing sector, which currently holds the top position in ASEAN and ranks among the top 10 globally. Moreover, these measures align with Thailand's aspiration to achieve carbon neutrality by 2050, as expressed by Mr. Narit Therdsteerasukdi, the Secretary General of Thailand's Board of Investment and the Executive Committee Secretariat of the EV Board.

Beginning in 2022, the first phase of Thailand's Electric Vehicle Support Program (EV 3) witnessed the participation of 15 companies, encompassing manufacturers of electric passenger cars, pickup trucks, and motorcycles. This program has substantially contributed to the growth of the country's electric vehicle industry. From January to September 2023, the program's initial nine months saw an impressive 50,340 new EV registrations, representing a significant 7.6-fold increase compared to the corresponding period in the previous year.

Since 2017, Thailand's ongoing commitment to promoting EVs has attracted US$ 1.8 billion in investments, focused on the manufacturing of battery electric vehicles (BEVs), battery electric motorcycles, EV components and parts, and the establishment of charging stations.

What can we do for you?

We can help you start your business in the Electric Vehicle industry and avail the benefits from the Thai government and Board of Investment. For more than a decade, we have been facilitating foreign investors in registering their BOI-promoted companies in Thailand. Our inexhaustive scope of services is as follows:

Simply email us your business plan at officer@konradlegal.com and our team of professionals will get in touch with you within one working day.