Starting January 1, 2027, Thailand will dramatically increase the excise tax on imported electric vehicles to 35 percent. This affects battery electric vehicles, which currently have a 10 percent tax rate, as well as extended range electric vehicles, which were previously taxed at a 15 percent tax rate. The regulation targets vehicles imported as finished products or those that do not use Thai-made components.
The fiscal adjustment is based on decisions made in 2025 and 2026 by the National Electric Vehicle Policy Committee. This is due to significant pressure on the domestic market, as Thai industry associations warned of a crisis for local carmakers, who are unable to compete with significantly cheaper imports from China. Although 2026 figures show that electromobility in Thailand saw an increase in demand (electrified vehicles accounted for 55 percent of all new registrations for the first time), this growth mainly benefited foreign vehicle imports.
To maintain the attractiveness of the industrial location, the Ministry of Finance has ordered the consumption tax authority to hold direct talks with foreign investors and companies. Manufacturers who commit to making new investments in the production or assembly of key components in Thailand can expect special tax rates from the authority.
With existing financing programs, tax incentives and purchasing subsidies, Thailand has already attracted more than €3.5 billion in investments, including from Chinese manufacturers such as BYD, Changan and Great Wall Motor. In August 2026, approved investments across the entire electromobility ecosystem had amounted to the equivalent of 4.1 billion euros, spread across 189 projects. The fiscal adjustment starting in 2027 aims to sustainably retain these capital inflows into the country and secure the location based on the following principle:
Investment-driven vehicle imports will be directly linked to the willingness to invest locally. This ensures that Thailand does not remain simply a consumer market but is established as a hub for the production and export of environmentally friendly vehicles. The strategy focuses on creating high local value by specifically increasing the proportion of components made in Thailand to secure market shares for domestic suppliers.
nationalthailand.com, thairath.co.th, reuters.com
