Thailand has approved incentives for companies to transition their commercial fleets of large trucks and buses to battery electric vehicles, the government said on Wednesday.

Also on offer are cash grants for EV battery cell manufacturers, according to the government, adding the policies would reinforce Thailand’s status as an EV manufacturing hub, Reuters reported on Wednesday.

“This will significantly increase the adoption of electric trucks and buses, reduce pollution from the transportation and manufacturing sectors, and support companies’ moves to reach their net-zero targets,” the government said.

The support for companies will come in the form of special tax deduction granted to eligible companies, effective until December 2025, the government added.

Companies buying vehicles manufactured domestically will be able to deduct expenses of two times the actual price of the vehicles, without a price ceiling being set. For the purchases of imported vehicles, the deduction will be equal to 1.5 times the actual price of the vehicles, the report added.

Last year, Thailand approved a drawn down subsidy package for its booming electric vehicle industry, as the top regional auto hub looks to continue its strong EV sales momentum while balancing budgetary support.

By 2030, Thailand aims to convert 30 percent of its annual production of 2.5 million vehicles into EVs, according to a government plan.

Tax cuts and subsidies rolled out by Thailand have already drawn a raft of Chinese carmakers, including BYD and Great Wall Motor have committed to invest $1.44 billion in new production facilities in the country.

The sole Thai distributor of BYD will triple its dealerships in Thailand in two years, it said, helping to cement the Chinese automaker’s dominant position in its top overseas market.

BYD overtook Tesla in the fourth quarter last year as the world’s biggest EV maker. The company’s expansion in Thailand underscores its global push – especially in markets where its US rival has yet to become a major vendor – amid slower EV sales growth in its home market China, Reuters reported last month.

For decades, the world’s 10th largest auto manufacturing economy has been dominated by Japanese firms such as Toyota Motor Corp and Honda Motor Co which has been using Thailand as their major export base.

Elsewhere in Indonesia, the government has also announced new incentives to encourage sales of locally produced and imported electric vehicles (EVs) on Wednesday, in its latest bid to boost take-up of environment-friendlier cars as well as attract investment to its domestic EV industry, Reuters reported.

Feature photo credit: GWM Malaysia

BYD’s Thai distributor to triple EV dealerships, expand commercial offerings – report