Thailand will raise import taxes on fully built electric vehicles to 35% from January 2027, a move designed to force automakers to invest in local production and shift the country from being merely an automotive assembly hub to a regional EV manufacturing center. The Cabinet approved the increase on November 3, 2026, jumping the excise duty for imported battery electric vehicles (BEVs) from 10% and for range-extended electric vehicles (REEVs) from 15%, creating a stark contrast with the 2% rate for BEVs that meet local content criteria and participate in promotion measures.
Thailand to Impose 35% EV Import Tax in 2027
The new tax structure, effective January 1, 2570, is a direct response to the dominance of imported EVs in the Thai market. Data from the Excise Department shows that from January to September 2026, imported EVs accounted for 71.4% of total registrations. Only 28.6% were locally produced.
This reliance on imports persists even as the country attracted around US$4 billion in EV and component investments. The government is now using tax policy as a lever for industrial transformation.
The government’s goal is not just to increase the number of EVs. The policy aims to create a complete ecosystem for EV production within Thailand, said Ekinit Nitithanprapas. This will build a supply chain, create jobs, and elevate the skills of the Thai workforce.
The industry is to become a New Growth Engine
for the economy.
The Cabinet made its decision during an official meeting in Udon Thani province on November 3, 2026. The meeting also instructed the Excise Department to consider adjusting the excise tax structure. This adjustment would increase the competitiveness of the automotive and parts industry.
The instruction aligns with a key principle. The National EV Policy Committee approved it on September 10, 2026. The committee assigned the Excise Department to consider the implementation.
The government anticipates the policy will not result in a loss of state revenue. The Excise Department projects that excise duties on automobiles will increase.
This projected revenue could decrease if the proportion of domestically produced vehicles rises. That outcome is itself the goal of the measure, designed to stimulate investment and production within Thailand.
Tax Hike to Reshape Thailand’s EV Market
The impact of the tax hike will be felt unevenly across the market. KResearch, a unit of Kasikornbank, predicts it may cause prices for imported BEVs to rise by an average of 25%. This creates a significant competitive disadvantage against locally produced models.
Conversely, automakers with existing production bases in Thailand will gain a stronger competitive edge. BYD and Great Wall Motor are among those expected to benefit. The policy is also expected to accelerate investment. The Finance Ministry reports that a ninth assembly plant is already in the works following the tax announcement.
As The Standard reported, Masato Otaka has cautioned that while promoting EVs is positive for the environment, past policies of zero-tax imports have harmed the domestic industry and exports. He urged a more balanced approach.
Consumers are also advised to consider the new tax implications when purchasing. Those who have already ordered a vehicle but will take delivery after January 1, 2570, should clarify whether their chosen model is imported or locally produced. They should also inquire about detailed pricing conditions with dealers before finalizing their purchase.
Thailand Overhauls Local Content Rules
The new policy is part of a broader, three-phase strategy. Luang Sungnit revealed that the government will overhaul the definition of “Local Content” within the next three years. The new definition will ensure it reflects genuine domestic value addition, not just financial accounting metrics.
The new calculation will exclude costs like bookkeeping, financial expenses, and utility fees. It will focus instead on tangible components.
This move is designed to address a critical weakness. Luang explained the current system’s flaw. Under the old WTO rules, you can include financial costs and profits, which is about 15%, plus water and electricity costs of another 5%. That’s already half of the 40% threshold without any real local manufacturing.
The phased approach is meant to give automakers time to adapt. In the future, tax rates will be tiered. Rates will be 10% for those with local production and high local content. Rates will be 15-20% for those with production but insufficient local parts. Rates will be 35% for pure imports.
This structure, as detailed by Manager Online, is designed to create a clear pathway for investment. It also penalizes those who merely use Thailand as a sales outlet.
The Excise Department is also preparing to review tax incentives. The review is for the production of high-value EV components, especially batteries. Batteries are still largely controlled by parent companies abroad.
The goal is to facilitate Thailand’s transition to becoming a base for component manufacturing and EV exports in the long run.
The automotive and parts industry is a key sector of the Thai economy. It involves approximately 2,300 manufacturers in the supply chain and more than 750,000 workers. Promoting domestic production is expected to spread benefits across the broader economic system.
As Thailand prepares for the 43rd Thailand International Motor Expo from December 2-13, 2026, at IMPACT Challenger, these policy shifts are set to dominate industry discussions. The event, organized by Media International Co., Ltd., will be a key platform for automakers to showcase their strategies in response to the new tax laws.
