Thailand to Raise Tax on Imported Electric Vehicles to 35% From 2027
Key Facts
Thailand’s cabinet approved on November 3 an increase in the excise tax on imported battery electric vehicles and range-extended electric vehicles to 35%, with the new rate taking effect on January 1, 2027, the Thairath newspaper reported. The new uniform rate replaces two different rates based on vehicle type. The tax had been 10% on battery electric vehicles and 15% on range-extended vehicles. The Revenue Department said the restructuring aims to encourage automakers to invest in local production. Authorities also link the change to increased use of Thai components, fairer competition, and preserving production bases, jobs and supply chains in the automotive sector.
The decision comes as electric vehicle imports into the Thai market accelerate. The value of electric passenger car imports rose 138% year on year in September to $421 million, according to The Straits Times. China accounted for about 99% of those imports during the month. In the first nine months of 2026, electric passenger car imports totaled $2.37 billion. China accounted for 96% of them, making the flow of Chinese cars a key part of the market picture ahead of the new tax taking effect.
Import growth has coincided with a rapid expansion in domestic sales, in a market where the government is seeking to direct investment toward production in the country. Sales of battery electric passenger cars rose 80% year on year in September to 16,404 vehicles. In the first nine months of the year, sales nearly doubled to 161,532 vehicles. The figures put the market on two simultaneous tracks: growing domestic demand and heavy reliance on imported cars, particularly those from China. The tax policy aims, according to the Revenue Department, to push automakers to establish local production and use more Thai components while preserving production bases, jobs and supply chains.
Finance Minister Ekniti Nitithanprapas said in September that the potential tax on fully imported electric vehicles would be close to 30%. He made the remark after being asked whether the rate might be between 31% and 32%, saying it “should be close to the 30% level,” according to Bloomberg Law. The decision approved by the cabinet in November sets a 35% rate for battery and range-extended vehicles, effective at the start of 2027. The gap between the earlier statement and the adopted rate reflects the policy’s development from an initial estimate to a formal rate approved by the government. The sources provided no figure for the decision’s effect on car prices or company sales.
Industry forecasts point to continued growth in new electric vehicle registrations in Thailand during 2026. Registrations are expected to reach between 200,000 and 220,000 vehicles this year, compared with about 120,000 in 2025, according to The Straits Times. Registrations had already reached 165,040 vehicles by the end of September. That total puts the market on course to approach the annual forecast range before year-end. The figures come as companies and the government prepare for the new tax to take effect, amid a stated goal of stimulating local production.
Next, the finance minister plans to discuss the new tax policy with Japanese investors during a Board of Investment roadshow in Japan in mid-November, The Edge Malaysia reported, citing Bloomberg. The roadshow gives the government an opportunity to present its tax direction to investors in the automotive sector before the new rate takes effect. The stated aims of the restructuring center on investment and production in Thailand, increased use of local components, and preserving production bases and employment. The specified effective date is January 1, 2027. Discussions with Japanese investors will be a near-term step in promoting the new policy.