The Excise Department is planning to revamp tax rates for automobiles to encourage the shift from internal combustion engine (“ICE”) vehicles to emerging mobility technologies, such as electric (“EVs”) and hydrogen-powered vehicles. Tax rates on batteries will also be revised to promote the adoption of high-performance batteries, with criteria based on energy density (energy per unit weight) and lifespan (charge-discharge cycles).
The EV Board previously approved reduced tax rates for hybrid (“HEV”) and mild hybrid (“MHEV”) vehicles over a seven-year period. This decision aims to facilitate the shift from ICE vehicles to EVs vehicles in the future. Additionally, the board decided to overhaul the excise tax rates for hybrid vehicles by establishing a fixed rate for the years 2026-2032, replacing the former policy of gradual tax increases.
HEV vehicles that emit no more than 100 grams of Carbon dioxide (“CO2”) per kilometer will be subject to a fixed excise tax rate of 6%. For vehicles emitting between 100 and 120 grams of CO2 per kilometer, the tax rate will be 9%.
For MHEV vehicles, the tax measures specify that those emitting no more than 100 grams of CO2 per kilometer will be taxed at 10%, while those emitting over 100 grams will face a tax rate of 12%.
These tax revisions are part of the government’s broader strategy to promote sustainable transportation and reduce environmental impact, ensuring a smoother transition towards a greener future in the automotive sector.
Upcoming Restructuring of Excise Taxes on Cars_Bangkok Global Law