MITI Has Shown The Way For Thai Auto Sector To Do The Same

Thailand Auto Sector Pushing Chinese EV Brands Just Like MITI Is Doing

The Malaysians who are upset with MITI on the Chinese EV issue …… price rise from July 1st 2026 due to strict import conditions should take note that it’s also happening in Thailand.

Amid growing concerns over the impact of lower-cost vehicle imports on domestic manufacturing, a coalition of 10 automotive associations representing more than 1,500 automotive businesses (vendors and auto brands as well) in Thailand is preparing to urge the government to raise the excise tax on fully imported electric vehicles to at least 32%, with the stated objective of supporting local vehicle production and domestic auto-parts suppliers in response to lower-cost Chinese imports.

The Electric Vehicle Association of Thailand (EVAT), the Thai Auto-Parts Manufacturers Association (TAPMA) and allied industry groups are scheduled to submit emergency proposals to the government on May 14th, focusing primarily on Chinese automakers and covering both imported EVs and Chinese vehicles NOT assembled in Thailand.

Industry concerns over sector impact

The coalition stated that Thailand’s automotive industry is facing challenges during the transition towards electric vehicles. According to the group, the rapid EV transition, combined with the cost advantageof imported vehicles from China, could affect local production and Thai auto-parts manufacturers. 

The associations stated that producing vehicles in Thailand costs approximately 30-40% more than importing them from China, placing local manufacturers and parts suppliers at a cost disadvantage.

Proposal for 32% tax on fully imported EVs

The associations are seeking an increase in the excise tax on fully built-up imported EVs, or CBU EVs, to at least 32%. This would create a 30-percentage-point difference compared with domestically produced EVs, which are currently subject to a 2% excise tax. 

According to the group, the higher tax rate would reduce the cost gap between local manufacturing and imports, while supporting continued investment in vehicle production within Thailand.

Concerns over increased vehicle imports

The associations also expressed concern that, once the EV 3.5 support scheme concludes, carmakers with manufacturing operations in China may resume importing fully built-up vehicles instead of producing them in Thailand. 

The group stated that, without replacement measures, some automakers could reduce or discontinue local production operations. According to the associations, such a development would affect Thailand’s automotive supply chain, particularly local parts manufacturers that depend on orders from vehicle producers.

Import quota linked to local production

The coalition has also proposed an import quota system tied directly to domestic production levels. Under the proposal, companies making vehicle production investments in Thailand would be permitted to import CBU EVs at the existing lower excise tax rate of 10%.

However, the quota would be limited to no more than 10% of each company’s production volume. The stated objective is to prevent companies from relying primarily on imports while continuing to receive tax incentives intended for Thailand’s EV industry.

Proposal for stricter local content requirements

The industry groups are also seeking stricter local content requirements. The proposal calls for locally sourced parts to account for at least 80% of a vehicle’s value, alongside a revised calculation method intended to address existing loopholes. According to the coalition, the current system should be revised to prevent profits or labour costs from being calculated in ways that reduce support for Thai parts manufacturers.

Source: asianewsnetwork

Picture Credit: Fasmoto