The debate between consumers enjoying cheap imported EVs from China versus protecting the local automotive industry isn’t unique to Malaysia. While we’re having a debate here, a coalition of 10 automotive associations representing more than 1,500 operators in Thailand is lobbying for the government to raise taxes for CBU EVs to protect the Thai automotive ecosystem.
According to a report by The Nation, The Electric Vehicle Association of Thailand (EVAT), the Thai Auto-Parts Manufacturers Association (TAPMA) and allied industry groups will submit emergency proposals to the government today, May 14, asking for a raise in excise tax on CBU EVs to at least 32%, as part of measures to stabilise Thailand’s auto and parts industries.
The group of stakeholders warned that Thailand’s automotive industry is facing its ‘most serious crisis’ as the country shifts towards EVs. It said the a rapid transition to EVs, combined with the cost advantage of CBU imported models from China, could ‘severely weaken local production and threaten the survival of Thai auto-parts manufacturers’.
It added that producing vehicles in Thailand costs around 30% to 40% more than importing similar cars from China, and this puts local manufacturers and parts suppliers at a disadvantage. As such, the associations want the excise tax on CBU EVs to be raised to at least 32%, creating a 30-percentage-point gap with domestically produced EVs, which are currently subject to a 2% excise tax.
The group reasons that the higher tax would help offset the cost gap between CKD and CBU EVs, while encouraging carmakers to continue investing in local production. The call for the government to introduce stronger replacement measures is amidst fear that once Thailand’s current ‘EV 3.5’ support scheme ends next year, Chinese carmakers will revert to importing CBU EVs instead of continuing production in Thailand.
The coalition is also proposing a ‘carrot’ in the form of an import quota system linked directly to local production. Under the proposal, companies that make genuine investments in vehicle production in Thailand would be allowed to import CBU EVs at the existing lower excise tax rate of 10%. The quota would be capped at no more than 10% of each company’s production volume, however.
Finally, the group is also seeking for an 80% local content rule, with the figure referring to a vehicle’s value. They’re seeking a revised calculation method to close loopholes, adding that the current system should be tightened to prevent profits or labour costs from being counted in ways that ‘weaken the intended support for Thai parts manufacturers’.
This is what the parties affected by the Chinese EV wave want, so now the ball is in the Thai government’s court to balance the promotion of EVs with the need to protect domestic manufacturing, jobs and the country’s well-established auto-parts supply chain.
It’s a fact that local production – whether in Thailand, Malaysia, ASEAN or anywhere else in the world – will be costlier than what Chinese OEMs can achieve back home, and if these carmakers have a choice, it’ll be CBU, as exports also help ease the massive (and often excess) capacity that they’ve built in China. If a country has an automotive industry to protect, the only thing that can stop the tsunami is a seawall in the form of tariffs and duties. That is what Malaysia has done with MITI’s recent move to raise the barrier for CBU EVs – we’ve covered this topic extensively, and you can read more here.
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Learning from malaysia now eh. No problem we send over johari to you.
Haha, the Thais have caught our “protect local” bug
Good to see Thailand learning from the best. And thank you Johari for protecting our local brands. Malaysians must be patriotic and buy local EV, not BYD.
Anyone think that Thailand is that :STUPID to manufacture EV that cannot compete with others ? Cheaper parts makes Thailand competative and thus ATTRACT more investment. Plus Thais will be Getting Cheaper EV. Unlike Malaysia …. which RESTRICT RIGHTS to own EVs at reasonable prices.
Learn from Mr Trumpet everybody protection your bisnes. Sweat shop product from land grab own self draw dash line we must not sokong. Local car industri is rebadge only so no big deal just who can make pocket full only.
Using Tax to protect local industry is not something new. But telling CKD manufacturer that 80% of what they manufacture here cannot be sold locally, knowing that exporting to other countries will attract taxes at the destination country, this making the 8 out of 10 cars manufactured here have no market is unheard off.
MITI think they are Donold Trumpt and we are USA, that we have the technology, market and guns to make demands?
They did not learn from MITI, they implement due to the proper OEM parts which is more qualities than us, those who ever source or bought parts from thailand will know this fact, basically MITI just trying so hard to blow this up like other countries doing the same bla bla bla! but its not!
MITI is alot SHITTER than them, flip-floping this and that, its not like we dont have any TAXES? in additional of HIGH TAXES, we implement alot more stupid PROTECTION RULES and REGULATIONS for investors!
BYD has been highly subsidized by the Chinese government. Billions. When the competition has been killed off, the subsidies are slowly withdrawn. Countries that realize this have started imposing barriers and restrictions on BYD & chinese EVs.
ccp so kind to directly subsidize millions of car buyers worldwide. they must be stupid not to accept free money without strings atached.
Thailand also become stupid like malaysia to impose tax on china brand cars. All countries imposing tax to china brand cars are so stupid, at the end of the day their citizens are suffering because cannot purchase good quality cars from china at affordable prices
A 5% additional tax is sufficient to fund local R&D or support the fabrication and rebadging of local products using acquired machinery.
A sum of 25,000 THB, representing 5% of a 500,000 THB (RM 60k) base, is enough for the local manufacturing fund, provided Government is distributing it accordingly.
Then the local company have fund to looks for oversea Technology and Consultants for support. It’s 2026 and Ai era now, why need spoon feeding partnership?