From 1 January 2027, Thailand will drastically increase the consumption tax on imported electric vehicles to 35 per cent. This affects battery-electric vehicles, which currently have a tax rate of 10 per cent, as well as range-extended electric vehicles, previously taxed at 15 per cent. The regulation targets vehicles imported as finished products or those that do not use components manufactured in Thailand.
The tax adjustment is based on decisions made in 2025 and 2026 by the National Committee for Electric Vehicle Policy. It follows significant pressure on the domestic market, as Thai industry associations warned of a crisis for local automakers, which cannot compete with the significantly cheaper imports from China. Although 2026 figures show that electromobility in Thailand experienced a surge in demand – with electrified vehicles accounting for 55 per cent of all new registrations for the first time – this growth primarily benefited imports of foreign vehicles.
To maintain the attractiveness of the industrial location, the Ministry of Finance has instructed the consumption tax authority to hold direct discussions with foreign investors and companies. Manufacturers that commit to new investments in the production or assembly of key components in Thailand can expect special tax rates from the authority.
With existing funding programmes, tax incentives, and purchase subsidies, Thailand has already attracted over €3.5 billion in investments, including from Chinese manufacturers such as BYD, Changan, and Great Wall Motor. By August 2026, approved investments in the entire electromobility ecosystem had risen to the equivalent of €4.1 billion, spread across 189 projects. The tax adjustment from 2027 aims to sustainably retain these capital inflows in the country and secure the location based on the following principle:
Investment-driven vehicle imports will be directly linked to a willingness to invest locally. This ensures Thailand does not remain merely a consumer market but establishes itself as a hub for the production and export of environmentally friendly vehicles. The strategy focuses on high local value creation by specifically increasing the share of Thai-made components to secure market shares for domestic suppliers.
