Thailand's EV package takes backseat due to caretaker govt restrictions

Supattanapong, who is also deputy prime minister, said the National Electric Vehicle Policy Committee, aka EV board, had earlier approved a comprehensive EV industry promotion package. However, he said, he is hesitant about putting it to the Cabinet for final approval because it may get scrapped due to the government’s caretaker status.

He was responding to criticism that the government has been too slow in implementing the EV industry promotion package and the delay may hinder Thailand’s ambitious goal of becoming the region’s EV hub.

Prime Minister Prayut Chan-o-cha dissolved the House on March 17, after which his Cabinet entered the caretaker status pending the general election on Sunday and the formation of a new government. During this transitional period, the government cannot initiate new projects or make approvals that require extra funding, unless it receives a green light from the Election Commission.

Supattanapong said though the EV package had been approved by the EV board, he did not know how to forward it to the Cabinet.

He said he has asked the Cabinet Secretariat to sound out opinions from other government agencies on what he should do about the EV package.

He also noted that the package would require a huge budget, especially when it comes to subsidies for new EV battery plants.

“I still need to find out what lies within the power of a caretaker government,” Supattanapong said.

He added that if the Cabinet were to approve the budget for new EV battery plants, it would create a burden for the new government.

“We have to be very careful with what we do because the entire package may be killed and that will only complicate matters,” Supattanapong said.

Hence, he said, he was wondering whether he should only inform the Cabinet about the obstacles some government agencies are encountering with the policies to promote sales and manufacturing of EVs. Such agencies include the Excise and Customs departments.

He said if the Cabinet is informed of these issues, the agencies will be able to tackle them and continue with the operations.

The package that has been approved by the EV board includes two key measures, namely:

• Reducing excise tax on imported EV batteries from 8% to 1% and waiving import tax for the first two years.

However, importers are required to start manufacturing EV batteries locally at the ratio of two to one imported pack to make up for the tax waiver. Local manufacturing of EV battery packs must start in the third year, once the two-year tax waiver is over. However, if the manufacturing is delayed to the fourth year, the ratio will rise to three locally-made battery packs for every imported one.

• Allocating 24 billion baht to subsidise the manufacturing cost of EV batteries on a first-come-first-served basis. A battery pack with an 8GWh (gigawatt hours) capacity can get a subsidy of 400 to 600 baht for every KWh (kilowatt hours) of the battery. This subsidy will continue until the allocation dries up.