The Finance Ministry looks set to submit support measures for plug-in hybrid electric vehicles (PHEVs) to the cabinet by April.
According to Deputy Finance Minister Paopoom Rojanasakul, these support measures will take effect from Jan 1, 2026.
The two key principles of the PHEV support measures are: separating the tax structure of PHEVs and electric vehicles (EVs); and the tax rate for PHEVs will not be based on carbon emissions but on the distance a vehicle can travel per full charge.
Vehicles with a longer range will be subject to a lower tax rate, while those with a shorter range will face a higher rate.
A third measure will remove the current fuel tank capacity restriction, which currently limits PHEVs to a maximum tank size of 45 litres.
According to Mr Paopoom, further details on the PHEV support measures, including the specific tax rates, will be disclosed after the cabinet approves the measures.
Under the previously approved PHEV tax structure, PHEVs that can travel more than 80 kilometres per charge are subject to a 5% tax rate, while those with a range of less than 80km per charge are taxed at 10%.
Mr Paopoom emphasised that supporting PHEVs is a suitable approach to sustain Thailand's automobile manufacturing industry, which has traditionally been based on internal combustion engine-powered vehicles, while transitioning towards the production of battery electric vehicles in the future.
"We must support hybrid vehicles that combine internal combustion engines and EV technology, which means PHEVs, during this transition phase towards full EV adoption in the future," he said.
He also addressed the new battery tax structure, saying that the Excise Department is currently revising it.
At present, the excise tax on batteries is applied at a flat rate of 8%, regardless of battery type or charging capacity. The new structure will implement a tiered tax system. For example, batteries with a longer life cycle per charge will be taxed at a lower rate than those with a shorter life cycle, while disposable batteries will be taxed higher than rechargeable ones. Additionally, tax rates will consider the battery's energy capacity relative to its weight -- batteries with higher energy storage but lower weight will be taxed at a lower rate than those with a lower capacity but greater weight.
According to Mr Paopoom, starting from next year EV importers benefiting from government support measures will be required to manufacture EVs domestically as a form of compensation for imported EVs. This is in accordance with the conditions for receiving state incentives. It is estimated that around 100,000 EVs will be produced domestically next year as part of this offset requirement.