No Incentives for Hybrids, Thailand Says

The Thai government rejects Toyota’s request to include hybrid vehicles in investment-incentive packages about to be offered for electric vehicles.

Industry Ministry Permanent Secretary Somchai Harnhirun says the Board of Investment (BOI) will not include hybrids because government policy is to promote international-standard automobiles.

The cabinet agreed in August to waive import tariffs on battery-electric vehicles (BEVs) and to give BOI incentives to investors who set up assembly plants for BEVs and produce critical parts such as batteries and motors within five years.

Toyota Motor Thailand Senior Vice President Suparat Sirisuwannagkura argues the government should include hybrid vehicles in its promotion policy to keep them no more than 5% more expensive than pure internal-combustion-engine vehicles.

Suparat argues hybrid technologies share some core technologies such as batteries and motors that producers could develop further for plug-in hybrid vehicles, BEVs and fuel-cell vehicles (FCVs) in the future. Moreover, EVs still have many limitations, especially in battery technology, and automakers may eventually bypass them and leapfrog to FCVs.

Suparat says Toyota's facility in Thailand has the capacity to develop more HEVs in the near future, “But a production volume of more than 100,000 vehicles and batteries a year will be tough to achieve without government support.”

The Nation English-language newspaper reports Somchai told a seminar held by the Thailand Development Research Institute (TDRI) that the government does not pick winners.

“We want to see real investment,” Somchai says. “We won’t be giving away our taxes for free, but we want a commitment as to what they will produce in the future.”

TDRI researchers told the seminar the government must revamp the automobile excise tax structure to accurately reflect emission-release levels and be technology-neutral. They say that would make next-generation vehicles more competitive, increase buyer demand and make Thailand attractive as a manufacturing base for critical EV parts.

TDRI President Somkiat Tangkitvanich says as global automotive trends tilt toward environmentally friendly vehicles, Thailand’s traditional non-alignment of energy and industrial policies could hinder the future of its local auto industry.

A Bangkok Post report quotes research fellow Wichsinee Wibulpolprasert saying Thailand’s ambition to develop EVs is unlikely to be realized any time soon because the domestic car market is not yet ready and its focus remains largely on conventional vehicles.

She says while the government wants to generate a fleet of up to 1.2 million EVs and increase the number of charging stations to 690 by 2036, there are no clear policies on renewable energy and the environment.

“The number of EVs and charging stations is just the final result,” Wichsinee says. “What is desperately needed for Thailand’s future automotive development is a solid background and fundamentals, which are renewable energy and environmentally friendly industry development plans.

“EVs are an upcoming technology for the world’s automobiles, but the current situation is that excise tax for eco-friendly vehicles and conventional ones still overlap, making EV retail prices unattractive for buyers.”

More importantly, Wichsinee says, the government has yet to launch any schemes to create a production hub for core components of EVs, such as batteries and motors, which are the building blocks of high-tech vehicles.

She says that when the government waived customs duty for related components for assembling hybrids during 2011-2013, which cut retail prices by TB20,000 ($574), it boosted sales from 9,256 units in 2010 to 69,911 units in 2015.

“The government should develop and stimulate demand for HEVs and PHEVs in the short run, with more tax incentives to support massive production,” she says.