In return for incentives granted in Thailand’s EV policy, electric vehicle manufacturers benefiting from the program are now required to invest in producing certain key electric vehicle components domestically by 2026, aligning with the country’s push for local EV assembly.
Ekniti Nitithanprapas, director-general of Thailand’s excise department, stated that by 2026, three critical EV components must be produced in Thailand: the electric motor, the reducer (which functions like a gearbox in combustion engine vehicles), and the inverter (which converts DC from the battery to AC to power the motor).
This follows the introduction of Thailand’s first (3.0) and second (3.5) phases of EV promotion measures, where establishing domestic production bases and manufacturing EVs locally is a key condition, according to the Bangkok Post.
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Under these EV support measures, participating companies are required to locally produce electric vehicles equivalent to 100% of their sales in the first year to offset imports. If they fail to meet this local manufacturing target in the second year, they must produce 1.5 times their sales volume.
According to the department, this requirement pushes automakers to establish production facilities in Thailand, driving new investments and industries. So far, companies involved in the program have gradually set up production bases in the country, with total investments exceeding 80 billion baht.
Previously, Thailand’s Board of Investment (BoI) approved measures to encourage EV battery manufacturing. Investments at the module level receive an eight-year corporate income tax exemption, while pack-level investments get a five-year exemption, though they are not covered by EV promotion measures. However, cell-level investments benefit from both an eight-year tax exemption and subsidies from the EV fund.
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