BOI Incentives for Battery Electric Vehicles

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Introduction:

Thailand has emerged as a prominent player in the global automotive industry, ranking among the top 10 countries in terms of automotive production and exports (source). In recent years, the Thai government has made a concerted effort to position the country as a regional hub for electric vehicle (EV) manufacturing. To achieve this goal, the Board of Investment (BOI) has implemented a comprehensive set of incentives and policies to encourage investment in the production of battery electric vehicles (BEVs) and their key components.

Key Points

• Thailand aims to have electric vehicles, including battery electric vehicles (BEVs), account for at least 30% of the country’s total vehicle production by 2030.
• The Board of Investment (BOI) offers attractive incentives for BEV manufacturing projects, including corporate income tax exemptions, import duty exemptions, and non-tax benefits like land ownership and foreign expert employment.
• The BOI incentives are structured based on the total investment capital, with more generous benefits for projects with an investment of at least THB 5 billion.
• Additional subsidies and tax reductions have been introduced for domestically produced BEVs, including passenger cars, pickup trucks, and motorcycles, to promote local manufacturing and offset imports.
• The BOI also provides incentives for the production of electric vehicle batteries, charging stations, and other key EV components to support the development of a domestic EV supply chain.

What is Thailand’s Current Position on EVs?

The Thai government’s commitment to transitioning towards a greener economy is highlighted through its National Electric Vehicle Policy. The National Electric Vehicle Policy aims to have electric vehicles, including BEVs, account for at least 30% of the country’s total vehicle production by 2030. To help Thailand meet this ambitious target, the BOI has introduced a series of attractive incentives and initiatives that cater to both the supply and demand sides of the EV ecosystem.

What Incentives Do the BOI Offer for BEV Manufacture?

The BOI’s incentives for Electric Batteries manufacturing in Thailand are designed to provide a wide range of benefits that address various aspects of the investment landscape. The BOI incentives are designed to encourage companies to establish or expand their BEV production operations in Thailand, while also encouraging the development of a strong domestic supply chain.Thanks to our partners, you can find ties online to suit every preference and budget, from budget to top-of-the-range super stylish models.

What Incentive Packages are Available from the BOI?

The BOI offers two distinct incentive packages based on the total investment capital (excluding land costs and working capital) of the Electric Batteries manufacturing project:

Projects with Total Investment Capital of at Least THB 5 Billion

1. 8-year corporate income tax (CIT) exemption, capped at 100% of the total investment capital (excluding land costs and working capital)
2. Import duties exemption on machinery
3. 1-year import duties exemption on raw materials and essential materials for products manufactured for export
4. Non-tax incentives, such as permission to own land, bring in skilled workers and experts, and remit funds abroad in foreign currency

Projects with Total Investment Capital Below THB 5 Billion

1. 3-year CIT exemption, capped at 100% of the total investment capital (excluding land costs and working capital)
2. Additional 1-year CIT exemption per key part (excluding batteries) manufactured within 3 years of starting BEV/BEV platform production
3. Additional 1-year CIT exemption if the actual production of BEV and/or BEV platforms exceeds 10,000 units per year within 3 years of commencing production
4. Import duties exemption on machinery
5. 1-year import duties exemption on raw materials and essential materials for products manufactured for export
6. Non-tax incentives, such as permission to own land, bring in skilled workers and experts, and remit funds abroad in foreign currency

It’s important to note that Electric Batteries manufacturing projects are also eligible for additional CIT exemptions under the BOI’s merit-based incentives, further enhancing the attractiveness of investing in this sector.

What is the Second Phase of Support Measures for BEVs?

On the 19th of December 2023, Thailand’s Cabinet approved the resolution of the National Electric Vehicle Policy Committee Meeting No. 1/2023 . The aim of this resolution was to introduce new incentives for the second phase of electric vehicles promotion for battery electric vehicles (“BEV”). 

Government Subsidies

The BOI will offer a new set of subsidies that will be available to projects whose business activities consist of developing passenger cars (seating capacity not exceeding 10 persons), pickup trucks, and motorcycles (“EV 3.5”). The following incentives and subsidies will be available from 1st January 2024 to 31st December 2027.

*SRP = Suggested Retail Price

Vehicle Type	Vehicle Type	Subsidy (THB per Sold Vehicle) from 2024 to 2027
Passenger Cars (SRP not exceeding THB 2 million)	50 kWh or more	For imported and domestically produced cars:  – 100,000 in 2024  – 75,000 in 2025 For domestically produced cars:  – 50,000 in 2026 and 2027
	10 kWh ≤ 50 kWh	For imported and domestically produced cars:  – 50,000 in 2024 – 35,000 in 2025 For domestically produced cars:  – 50,000 in 2026 and 2027
Pickup Trucks (SRP not exceeding THB 2 million)	50 kWh or more	100,000 for domestically produced pickup trucks
Motorcycles (SRP not exceeding THB 150,000)	50 kWh or more	10,000 for domestically produced motorcycles

Import Duty Reduction for Completely Built-Up (“CBU”) Passenger Cars

As per the Ministry of Finance Notification re: Duty Reduction and Exemption of the Completely Built-Up Battery EV dated 28^th December 2023 (“MF Notification”), importers of CBU passenger cars (with an SRP not exceeding THB2 million per unit) and comply with the requirement under the MF Notification will be eligible to receive a reduction on their  import duty of up to 40% from 1^st January 2024 to 31^st December 2025.

Excise Tax Reduction

The new resolution also states that BEV passenger cars with an SRP not exceeding THB 7 million per unit will be eligible for the reduction of the excise tax from 8% and 10% to 2% in 2024 – 2027.  

In relation to the BEV pickup trucks with the same criteria as listed in the table above, the excise tax applicable will be reduced from 10% to 0% in 2024 – 2025 and to 2% in 2026 and 2027.  

The applicable excise tax for the BEV motorcycles with the same criteria as those mentioned in the table above will be reduced from 5% and 10% to 1% from 2024 to 2027.

In order for companies to be able to receive these subsidies and tax incentives, eligible companies must domestically produce BEVs. This is a requirement as part of the EV3.5 program as it is a way to offset the imports at the offset ratio of 1:2 by 2026 (import one BEV, produce two BEVs), or 1:3 by 2027 (import one BEV, produce three BEVs).

What is the Eligibility Criteria for a Promotion from the BOI for BEV Manufacture?

To qualify for the BOI’s incentives, BEV manufacturing projects must meet specific criteria. These include:

1. Investing in a package that covers the manufacture of batteries (either by the applicant or a third party), the development of charging stations and battery swapping infrastructure, and the establishment of local Thai suppliers for technology training and technical assistance.
2. Ensuring that the BEVs sold in Thailand comply with the relevant standards and specifications stipulated by the BOI.
3. Commencing the manufacture of BEVs/BEV platforms, along with the production of batteries from the cell manufacturing process (e.g., module or battery pack manufacture), within 3 years of receiving the promotion certificate.
4. Manufacturing at least one of the following key parts within 3 years of starting BEV/BEV platform production: traction motor, battery management system, or driving control unit.
5. Companies who receive the incentives for the CBU passenger cars must domestically produce BEVs at the offset ratio of 1:2 by 2026 (import one BEV, produce two BEVs), or 1:3 by 2027 (import one BEV, produce three BEVs).

What are the Incentives for Battery and Parts Manufacturing?

In addition to the incentives for Electric Batteries manufacturing, the BOI has also implemented a range of benefits to support the development of the broader EV supply chain in Thailand. This includes incentives for the production of electric vehicle batteries (EVB), EV charging stations, and other key EV components.

Incentives for EVB, EV Charging Stations, and Other EV Parts

The BOI offers the following incentives for projects manufacturing batteries for EV (EVB), EV charging stations, and other EV parts:

1. EVB with Cell Production Process: CIT exemption for a minimum of 8 years
2. EVB with Module Production Process: CIT exemption for a minimum of 5 years
3. EV Charging Stations: Producers are required to obtain ISO 18000 certification within 3 years of receiving the BOI promotion certificate
4. Other EV Parts: Varying levels of CIT exemptions, depending on the specific component and its importance to the EV supply chain

These incentives aim to attract investment and foster the development of a robust domestic supply chain for the EV industry in Thailand, further strengthening the country’s position as a regional hub for EV manufacturing.

BOI-Approved Projects for EVB, EV Charging Stations, and Other EV Parts

As of June 2022, the BOI has granted promotion benefits to 16 production projects for batteries for EV, with a total investment of just THB 4.82 billion. This demonstrates the growing interest and investment in the EV parts manufacturing industry in Thailand.

The BOI’s incentives for these projects are designed to encourage the localization of EV component production, ensuring the availability of essential parts to support the growth of the Electric Batteries manufacturing ecosystem.

Companies the have Received a BOI Promotion for EVs

The BOI has been actively approving investment applications in the EV sector. Below is some examples of the current promotions and investments:

Hybrid Electric Vehicles (HEV):

Estimated investment: 30,000 Million THB across projects. 

Promoted Companies: Nissan, Mitsubishi, Toyota, Honda, GWM and MG

Plug-In Hybrid Electric Vehicles (PHEV):

Estimated investment: 9,000 Million THB across projects. 

Promoted Companies: Mercedes-Benz, BMW, Mitsubishi, BYD, Toyota, MG and GWM

Battery Electric Vehicles (BEV):

Estimated investment: 34,000 Million THB across projects. 

Promoted Companies: Mercedes-Benz, Nissan, Mitsubishi, BYD, Toyota, MG, Honda, Horizon+ and GWM

Our Thoughts

The BOI’s incentive schemes for Electric Batteries manufacturing and the broader EV supply chain are a clear indication of Thailand’s commitment to becoming a leading player in the global electric vehicle market. By offering attractive tax benefits, duty exemptions, and other non-tax incentives, the Thai government is actively encouraging both local and international investors to establish or expand their EV-related operations in the country.

As Thailand strives to achieve its ambitious goal of having EVs account for 30% of its total vehicle production by 2030, the BOI’s incentives are expected to continue evolving and expanding to further drive the nation’s transition towards a sustainable and environmentally-friendly transportation sector.