Mazda Motor Corporation’s recent announcement of a THB 5 billion investment in Thailand’s Mild Hybrid Electric Vehicle (“MHEV”) production signals a strategic shift in the country’s automotive industry. The initiative aligns with Thailand’s Board of Investment (“BOI”) policies and the National Electric Vehicle Policy Board’s (‘EV Board”) incentives, reinforcing Thailand’s role as a key production and export hub for next-generation vehicles.
The investment benefits from Thailand’s updated excise tax structure, which reduces tax rates for HEV (6-9%) and MHEV (10-12%) under a seven-year incentive scheme (2026-2032). Additionally, BOI’s investment promotion measures provide tax and non-tax benefits to manufacturers integrating automation, robotics, and advanced technology into production.
Key legal aspects of the BOI’s MHEV support measures include:
- Carbon Emission Standards: Eligible vehicles must emit ≤120 g/km of CO₂ to qualify for the revised tax rates.
- Local Investment Requirements: Manufacturers must invest at least THB 1 billion (2024-2026) and THB 5 billion (2024-2031) in Thailand.
- Localization of Components: From 2026, batteries must be locally produced, and from 2028, manufacturers must use traction motors or propulsion-enhancing components from domestic sources.
- Safety Regulations: Vehicles must incorporate at least four out of six Advanced Driver Assistance Systems (“ADAS”).
The investment strengthens the automotive supply chain, supports local component manufacturers, and positions Thailand competitively in global trade, especially under free trade agreements (“FTAs”) such as the ASEAN-Japan Economic Partnership Agreement (“AJCEP”) and ASEAN-China Free Trade Area (“ACFTA”).
Mazda’s Investment in Thailand’s MHEV Sector_Bangkok Global Law