Summary · why it matters
Kasikorn Research Center released an analysis stating that the government is preparing a major restructuring of the automobile excise tax, dividing operators into three groups with different tax rates and conditions. The first group consists of manufacturers that already have factories and are ready to produce domestically; they will continue to use the original rates announced on January 1, starting from 2% depending on vehicle type and carbon dioxide emissions, but with a Local Content condition still under consideration, with two approaches: no less than 40% or 30% combined with the use of key components such as the e-Power system. The second group is a transition group that does not yet have factories in Thailand; they are expected to pay taxes at a level above 10%, varying by vehicle type, along with an import quota not exceeding 10% of factory production capacity, and they must produce to offset imports, for example importing BEVs and offsetting with BEVs at a ratio of 1 to 1, or offsetting with hybrids at a ratio of 1 to 2. The third group consists of importers of completely built-up vehicles, or CBUs, that have no plans to set up factories in Thailand; they will face tax rates higher than 30%. Kasikorn Research Center assesses that this measure will significantly reduce vehicle imports, especially affordable cars from China, and will help domestic vehicle production turn around and expand by about 4.9% next year, after an expected contraction of 1.8% this year. Meanwhile, domestic car sales have fallen to only 600,000 to 700,000 units per year, down from a peak of 800,000 to 900,000 units in the past, and Thailand's ranking in global vehicle production has fallen from 9th in 2013 and 10th over the past several years to 11th in 2025. Battery electric vehicles from China account for nearly 70% of the total value of vehicle imports into Thailand, and BEV sales in Thailand are likely to surge to one-third of total sales this year. Dr. Rujiphan Assarat, Assistant Managing Director of Kasikorn Research Center, said that clarity is still needed on two important issues: the setting of Local Content criteria and the assessment of domestic value added, and the adjustment of carbon dioxide emission standards to align with those of a key trading partner such as Australia.
