(Nov 3): Thailand approved a higher excise tax on some fully imported electric vehicles, stepping up efforts to protect its auto-manufacturing base and encourage automakers to produce locally.

Thailand's Excise Department Director-General Pornchai Thiraveja confirmed the cabinet’s approval on Tuesday (Nov 3) but declined to provide the final rate. Bloomberg News earlier reported that the government was considering raising the tax to around 30%.

The Thai Finance Ministry had proposed raising the tax on completely built-up electric vehicles that do not have local content from the current 10%. Thai media on Tuesday reported that officials were considering a rate of around 30%-40%.

The measure could reshape competition in one of Southeast Asia’s most important auto markets. Thailand has spent decades building the region’s biggest vehicle-manufacturing hub and more recently used subsidies and tax incentives to attract EV investment, much of it from Chinese automakers while its traditional manufacturing base remains dominated by Japanese brands.

The higher tax is designed to narrow the cost disadvantage for companies already producing vehicles in Thailand and encourage other EV makers to manufacture locally rather than supply the fast-growing market through imports.

The move comes as Thailand’s electric passenger-car imports more than doubled from a year earlier in September, with China supplying almost all of them.

Finance Minister Ekniti Nitithanprapas plans to discuss the government’s new EV tax policy with Japanese investors, Krungthep Turakij reported earlier, during a Board of Investment roadshow in Japan in mid-November.

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