FTI Targets 1.55M Vehicle Output After EV Import Tax Hike
The Federation of Thai Industries backs the government's plan to raise excise taxes on imported electric vehicles to 35 percent starting January 2027, aiming to protect domestic manufacturers and attract investment. The industry, which contributes 10 percent of GDP and employs over 800,000 people, targets at least 7 percent growth to reach 1.55 million units annually. The policy aligns with Thailand's Reinvent Thailand strategy to shift from volume-based production to high-value manufacturing and technology transfer.
The Federation of Thai Industries (FTI) supports the government's policy to drive the Thai automotive industry forward after the Cabinet resolved to approve the restructuring of excise taxes for battery electric vehicles (BEVs) and range-extended electric vehicles (REEVs) imported as completely built units (CBUs), raising the rate to 35 percent with effect from January 1, 2027. This is believed to help support the domestic vehicle manufacturing industry.
The restructuring of the excise tax on imported CBU vehicles to 35 percent plays a crucial role in supporting the domestic industry because it will help create trade fairness for entrepreneurs who have decided to invest and establish real production bases in Thailand. It also sends a clear policy signal that Thailand is committed to promoting investment to build domestic industry, transfer advanced technology, employ Thai workers and SMEs, and increase long-term economic value.
The Thai automotive industry accounts for 10 percent of GDP, oversees employment of more than 800,000 people, and covers businesses throughout the supply chain, especially more than 3,000 SMEs. It is expected that after the new excise tax structure takes effect from 2027 onward, the automotive industry will grow by no less than 7 percent, or production volume of not less than 1.55 million units, though this depends on the remaining stock imported before January 1, 2027, according to Pimjai.
Pimjai said the excise tax measures for imported vehicles align with the Reinvent Thailand strategy that the FTI is driving under the Joint Public-Private Committee for Economic Problem Solving, which aims to restructure the automotive industry from a volume focus to high value creation, upgrading multi-powertrain technology (both pickup trucks and the four xEV companions: BEV, HEV, PHEV, REEV), as well as supporting the production of future components (E-Parts) and connected and autonomous vehicle (CAV) systems.
In the next step, the FTI is ready to build on government policy to make the Thai automotive ecosystem as ready and complete as possible. It will move proactively to coordinate cooperation and invite foreign investors — both long-standing key partners that have built the foundation of Thai industry for many years, such as Japan, Europe, and the United States, as well as groups of leading vehicle and technology manufacturers from abroad — to expand investment in component manufacturing plants and research and development (R&D) centers in Thailand.
Coupled with fostering cooperation and business matching to push Thai component manufacturers and SMEs into global supply chains, this will drive Thailand toward becoming a sustainable world-leading vehicle production and export hub.
