Thailand looking to promote EV adoption by imposing a higher tax on internal combustion engine vehicles –

Thailand is continuing to explore ways to promote the take-up of electric vehicles (EVs) in a bid to reduce air pollution in the country. A possible route is to impose a higher tax on vehicles with internal combustion engines (ICE) so buyers will be prompted to look at EVs instead.

As the Bangkok Post reports, the government is scheduled to meet car companies next month to discuss such a proposal. The country’s current excise tax structure for cars is due to end in 2025, and there is apparent interest in considering a more appropriate rate, according to a source from the finance ministry.

The source was reported as saying that the government was looking at bumping the tax for ICE vehicles into the “highest” bracket among car types to encourage people to make the shift to EVs. Any such move would of course only happen in 2026, when the revamped excise tax structure is introduced.

One automaker that has been contacted by the government about discussing the tax increase proposal is Nissan. Atthawit Techawiboonwong, general manager for external and government affairs at Nissan Motor Thailand, said that the company would share with the government its ideas to promote the EV industry and stimulate demand.

He said that car companies are ready to follow EV policies, but more would be needed to ensure that the programme would be a success. He explained that many automakers previously told authorities that increasing the tax alone is not enough.

Atthawit said that other measures such as a corporate income tax rebate for companies buying EVs would be a good start. State agencies should also set a model for EV usage but, as he explained, this is impossible without amended state procurement regulations, which do not support the purchase of battery electric vehicles.

There were also many other elements to consider, including the high cost of EVs and the lack of infrastructure, something that has previously been brought up in discussions about the matter. “We have to consider various factors ranging from demand and prices to EV charging outlets. If buyers are not ready, we can’t sell the cars. EVs are expensive. Are Thais ready to buy them?” he asked.

In August, the country’s industry ministry mooted a plan to introduce a vehicle trade-in scheme involving rebate coupons, and open to all types of car models, including EVs. There had been plans to announce the programme before the end of the year, but earlier this month, the government said that given that details had not been finalised, more time and discussion is needed to flesh out the programme, and so it has been put on hold.

The Thai government has been looking at ways to reduce air pollutants, especially PM2.5 ultra-fine dust particles. According to the nation’s land transport department, the country has about three million cars registered that have been in use for over 15 years, and the eventual aim is to reduce pollution from these with a switch to newer, more efficient vehicles.

What do you think of Thailand’s proposal to promote EV take-up by increasing the tax on ICE vehicles? Would a similar move here work at pushing electrification along faster, or would it have a less than positive impact on industry growth? Share your thoughts on the matter in the comments section below.

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