Thailand’s cabinet has approved new tax measures aimed at increasing domestic purchases and manufacturing of plug-in hybrid electric vehicles (PHEVs), with the changes set to take effect on January 1, 2026.
Under the revised policy, PHEVs will be taxed based solely on their electric-powered driving range per charge. The previous criteria, which included fuel tank capacity as a determining factor, have been removed. The new regulation also establishes a separate tax category for PHEVs, distinguishing them from hybrid electric vehicles (HEVs).
Deputy Finance Minister Paopoom Rojanasakul said the elimination of the fuel tank size requirement aligns Thailand with global standards and removes a key barrier for manufacturers. He added that this shift would strengthen Thailand’s potential as a regional production hub for next-generation vehicles and offer greater flexibility for consumers.
According to the new rates, PHEVs with an electric range of 80 kilometers or more per charge will be taxed at 5%, while those with a range under 80 kilometers will be taxed at 10%.
Paopoom noted the adjustments are expected to stimulate investment in the auto industry and accelerate the transition from combustion engines to more environmentally friendly vehicles. He also emphasized the relevance of these policies for both urban commuters and intercity drivers.
Surapong Paisitpatanapong, vice-chairman of the Federation of Thai Industries and spokesman for its Automotive Industry Club, said the change comes at a time when demand for electric vehicles is increasing. He cited strong orders for PHEVs, HEVs, and battery EVs at the Bangkok International Motor Show, with sales continuing to grow even after the event concluded on April 6.
Despite a broader slowdown in domestic vehicle sales attributed to limited access to car loans, Surapong noted that the electric vehicle segment remains active, suggesting that buyers in this category are in a stronger financial position.
