The EV3.5 scheme, which runs from 2024 to 2027, offers tax cuts and subsidies to automakers in exchange for investment in BEV assembly plants in Thailand, reports the Bangkok Post.
To accelerate domestic industry growth, the scheme requires automakers to maintain a production-to-import ratio. Companies must produce two BEVs locally for every one imported between 2024 and 2025. The ratio rises to three locally produced vehicles for every imported unit by 2027.
However, industry leaders fear Chinese automakers may scale back or halt local production once they meet the minimum requirements under EV3.5.
An executive from the Electric Vehicle Association of Thailand (EVAT) who requested anonymity warned that such a shift could deal a serious blow to Thailand’s BEV manufacturing sector, as well as to auto parts makers and suppliers.
EVAT and nine other associations plan to submit a proposal to the government today calling for a 32% import duty on Chinese BEVs.
Chinese automakers enjoy zero tariffs on BEV imports under the Asean-China Free Trade Agreement, but imports are still subject to other duties depending on the type of vehicle.
Companies participating in the EV3.5 scheme receive further reductions on certain duties, giving them an added advantage in the Thai market.
Industry analysts argue that without stronger protections, Thailand’s auto parts sector, which comprises around 1,700 companies under the Federation of Thai Industries, will suffer. Most of these firms are small or medium-sized original equipment manufacturers, categorised as tier 2 and tier 3 suppliers.
Tier 1 producers are typically subsidiaries of global carmakers.
The associations also want the government to tighten requirements on local content.
Global EV producers receiving investment incentives from the Board of Investment must source 40% of their EV components domestically. The groups want to raise this figure to 80%, arguing that higher local content would strengthen Thailand’s supply chain and safeguard jobs.
Concerns over sluggish car sales have already prompted the National EV Policy Committee to ease production rules. Under the revised framework, each BEV produced for export counts as 1.5 units towards the quota, giving automakers more flexibility.
Still, industry leaders remain wary of Chinese firms adjusting their strategies in ways that could disadvantage Thai producers.
"A flood of Chinese EVs would hurt local BEV manufacturing, auto parts makers, and suppliers," the EVAT executive said. "We are hoping to submit and discuss the proposals with the government as soon as possible."
The associations plan to meet with officials from the Finance and Industry ministries to press their case.