The higher excise is scheduled for 1 January 2027, while qualifying locally manufactured electric vehicles currently face 2%. The government says it wants to protect domestic production and encourage investment.
Thailand plans to raise the excise tax on fully imported electric vehicles from 10% to 35% on 1 January 2027, CNA reported. Qualifying locally manufactured electric vehicles currently face 2%, giving them a wider tax advantage under the planned change. Excise is a tax on the sale of a particular good or service.
Under earlier incentive schemes, carmakers could import vehicles at preferential rates but had to offset those imports with domestic production. The government says the new measures aim to protect domestic production and encourage investment in local supply chains; it denies introducing them to appease Japanese manufacturers.
Thailand’s automotive industry developed over decades of Japanese investment, but Japanese manufacturers have lost market share to Chinese electric-vehicle brands, although many remain focused on hybrids and pickup trucks. Battery-electric passenger-vehicle sales nearly doubled to more than 161,000 in the first nine months of 2026, the Federation of Thai Industries said. Industry figures put imports at around 70% of electric-vehicle sales in that period.
Thailand aims for zero-emission vehicles to make up at least 30% of domestic vehicle production by 2030. BYD manufactures vehicles in Rayong and MG in Chonburi, while GAC Aion has a vehicle manufacturing hub in the country and recently opened a battery-pack assembly plant. Krisda Utamote, an honorary adviser at the nonprofit Electric Vehicle Association of Thailand, cited Tesla as a company without a Thai manufacturing base that would face the higher import rate; he said Tesla could discuss a preferential rate if it built a plant in Thailand.
Separately from the January increase, the government is proposing a three-tier excise system favoring Thai-made components. Under one potential threshold, manufacturers using 40% local content would pay 10% excise; those below it would face higher rates.
Analysis
Pavida Pananond, an international business professor at Thammasat University, called the increase a corrective measure but said it came late, with Chinese brands already dominating the market. Experts said a buying rush could occur before January and some models were expected to cost more the following year. She warned that sales could slump in 2027 and some brands could drop imported models and leave rather than build locally.
Ride-hailing driver Pichai Phungmai, who is considering an electric vehicle partly to reduce running costs, said an increase of 100,000 baht or more would make a car unaffordable for him. Noodle-shop owner Nuntapat Muangprasit said he would prefer monthly payments on a more efficient electric vehicle to the rising fuel costs of his diesel pickup. He would consider a locally made model if it saved money and met his needs.
Ko, a representative of Thai parts maker J Phiphat Autopart Industry identified only by his nickname, described increasingly unpredictable orders for conventional vehicle components. He said Chinese electric-vehicle investment offered opportunities, but established supplier networks, pricing pressure and the cost of new machinery made entry difficult. Pavida said Thai suppliers could adapt skills in areas such as seats and wiring, while batteries and motors would be harder to produce locally. She said Chinese suppliers serve a huge home market, making their costs difficult for Thai firms to match, and Chinese carmakers source high-value parts, batteries and software within their own groups or from trusted Chinese suppliers. Thailand would need time and targeted incentives to enter those segments, she said.
Krisda expects manufacturers to import and clear vehicles through customs before the deadline, allowing them to sell that inventory under the previous tax structure. Prices may therefore not rise immediately in January, he said.
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