Thailand EV-Board / BOI HEV Manufacturing Excise-Tax Incentives — Locked 6%/9% Excise Through 2032 Conditional on THB 3bn Investment

Mechanism

The 26 July 2024 EV-Board decision opens a separate excise-tax incentive lane for hybrid-electric vehicles, which the EV 3.5 package (2024-01-01-thailand-ev-3-5-package) deliberately excluded — EV 3.5 restricts purchase subsidies, the 2% excise rate, and CBU import-duty relief to battery-electric (BEV) passenger cars and pick-ups only. The HEV package instead grants a five-year (2028-2032) locked excise rate to qualifying domestic HEV producers:

• 6% excise on HEVs emitting ≤ 100 g CO2/km
• 9% excise on HEVs emitting 101-120 g CO2/km

To qualify, a manufacturer must (i) commit ≥ THB 3 billion in new investment during the 2024-2027 window, (ii) receive BOI investment- promotion approval, (iii) source key automotive parts from Thai suppliers (specific bill-of-materials list to be issued by BOI), and (iv) install at least four of six listed Advanced Driver-Assistance System (ADAS) features.

The five-year deferral between announcement and the 2028 start of the excise-rate window is unusual and is designed to align with end-of-life of existing HEV excise schedules and to give OEMs lead-time to localise the bill-of-materials. Failure to meet the THB 3bn investment threshold by end-2027 disqualifies the manufacturer from the 2028-2032 rate.

Downstream implications

• Distinct from EV 3.5: this is the Japanese-OEM hybrid lane,

positioned to retain Toyota / Honda / Nissan / Mazda Thai capex rather than cede those production lines to Chinese BEV gigafactories already locked in by EV 3.5 (BYD Rayong, MG/SAIC, GAC AION, etc.).

• Expected THB 50bn (~USD 1.4bn) in incremental HEV manufacturing

investment — sized below the EV 3.5 envelope (> THB 137bn approved by Aug 2025) but materially larger than typical sectoral BOI schemes.

• The ADAS-feature mandate operates as a de-facto safety-content

uplift that flows into Thai-market consumer vehicles regardless of nameplate, raising baseline ADAS adoption.

• Tightens the regional Thailand-vs-Indonesia EV-cluster competition

by providing a complementary hybrid pathway that Indonesia's nickel-anchored BEV-only programme does not match, while Vietnam's Decree 182 investment-support fund remains tier-2-vehicle agnostic.

Open questions

• What is the BOI-published bill-of-materials list defining "key

Thai-produced parts"? (Anticipated to be issued separately.)

• Will the 2028 start window be brought forward if EV 3.5 BEV

uptake undershoots? Cabinet retains discretion to amend.

• Whether the same THB 3bn threshold applies per-OEM or

per-platform/model line.