A source from the Ministry of Finance revealed that the ministry is in discussions with the Board of Investment (BOI) to revise the conditions of the EV 3.5 incentive scheme. This comes in response to the ongoing price war in China—the world’s largest EV producer—where aggressive discounting has forced smaller or weaker EV manufacturers into bankruptcy. One tactic includes registering new EVs as second-hand vehicles with zero or near-zero mileage to claim sales and quickly regain liquidity by reselling them at lower prices.
BOI sees the EV industry as a key driver of Thailand’s economy, with over 2,000 component manufacturers and 900,000 jobs. Between 2022 and 2024, the number of EVs registered in Thailand rose sharply from 84,500 in 2022 to 206,000 in 2024. During this time, 644 investment projects in EV and parts manufacturing were approved, totaling over 280 billion baht.
The Ministry acknowledges that the support scheme, which provides subsidies to EV importers under the condition they build domestic manufacturing plants, may not have anticipated the intense competition and market flooding. Under EV 3.5, carmakers must produce twice the number of imported units by 2026, and triple by 2027. Failure to meet these targets requires repayment of the subsidy.
Discussions are underway to amend the calculation method for compensatory production. For instance, if a company imported 100 units and already produced 50, the requirement would be 200 (double of 100), minus 50 already made, resulting in a 150-unit production target—rather than calculating based only on the remaining unproduced imports.
This adjustment is expected to ease oversupply pressures in the market.
One notable case involves Neta Auto (Thailand) Co., Ltd., which couldn’t meet its EV 3.0 production requirements. The company has applied to transition to EV 3.5 to extend its timeline, but due to a name change to “Neta Thailand,” the EV board must reapprove the agreement, as it is now considered a different contractual entity from the one originally registered with the Excise Department.
The BOI is also concerned about the risk of a severe price war due to market oversupply. The EV board had already decided in late 2024 to allow manufacturers to carry forward their EV 3 production obligations into EV 3.5, where the new targets are:
- 2x production of imports by 2026
- 3x by 2027
EVs under this extension, as well as those imported or produced under EV 3.5, will not receive subsidies until compensatory production is fulfilled. Additionally, complete built units (CBUs) imported under EV 3 but not sold may be exported without being counted toward the compensation quota.