New battery electric vehicle (BEV) registrations in Thailand rose 82.2% in January-August 2026, more than three times the 23% growth recorded by hybrids.
But the government continues to support both technologies through separate incentive schemes, promoting BEV adoption while offering tax incentives to manufacturers of qualifying hybrids produced domestically.
This approach reflects Thailand’s long-established automotive industry, built over decades around Japanese carmakers and their local supplier networks. The government wants more electric cars on the road without losing the factories and suppliers that already build cars in Thailand.
Thailand Cuts Excise Tax for Locally Built Hybrids
Thailand’s National Electric Vehicle Policy Committee approved tax incentives for domestically produced hybrid electric vehicles (HEVs) in July 2024.
Qualifying manufacturers must invest at least 3 billion baht (roughly US$90 million) between 2024 and 2027, meet emissions and local component requirements, and equip vehicles with at least four specified ADAS (Advance Driving Asistance System) features. The original tax incentives for 2028-2032 were revised by the EV Board in December 2024, according to Thailand’s Board of Investment (BOI).
Under the revised scheme, qualifying HEVs emitting no more than 100 g of CO₂ per kilometre are subject to a 6% excise tax rate, while those emitting above 100 g and up to 120 g/km are taxed at 9%. The government expects the HEV incentive scheme to attract 50 billion baht (roughly US$1.5 billion) in new investment.
In December 2024, the EV Board also approved the inclusion of mild hybrid electric vehicles (MHEVs) in the incentive package. Unlike full hybrids, MHEVs use a lower voltage electrical system to assist the combustion engine and cannot propel the vehicle on electric power alone.
Under the revised scheme, qualifying MHEVs receive reduced excise tax rates from 2026 to 2032. Manufacturers must meet emissions requirements, equip vehicles with at least four of six specified ADAS features, use designated locally produced components, and invest at least 1 billion baht (roughly US$30 million) by 2026 and 5 billion baht (roughly US$150 million) in total between 2024 and 2028.
Plug-in hybrid electric vehicles (PHEVs) are subject to a separate excise tax structure from January 2026. Qualifying models capable of travelling at least 80 km on electric power alone are taxed at 5%, while those with a shorter electric-only range are taxed at 10%.
Thailand’s vehicle tax policy is still evolving. On 10 September 2026, the EV Board agreed in principle to restructure excise taxes, with higher rates for fully imported electric vehicles and lower rates for cars built in Thailand with local components.
The proposal follows data showing that imported vehicles accounted for approximately 63% of passenger BEV sales in Thailand from January to July 2026. The policy aims to translate this demand into greater domestic production and investment, according to the Federation of Thai Industries (FTI) report FTI Reveals Positive Signals in the Thai Automotive Market.
The detailed rules still need further government review and approval.
| Mild hybrid (MHEV) | Hybrid (HEV) | Plug-in hybrid (PHEV) | |
| Electrical system | Low-voltage system that assists the combustion engine | Larger electric motor and battery | Largest battery, can be charged from an external plug |
| Can run on electric power alone | No | Yes, over limited distances and at low speeds | Yes, with a much longer electric-only range |
| External charging | No | No | Yes |
| Excise tax treatment in Thailand | Reduced rates from 2026 to 2032 for qualifying models | 6% for emissions up to 100 g/km, 9% for emissions above 100 g and up to 120 g/km | 5% for an electric-only range of at least 80 km, 10% for a shorter range |
694,320 Hybrids on the Road
Thailand had 694,320 registered hybrid electric vehicles (HEVs) as of 30 June 2026, an increase of 28.02% year-on-year (yoy).
These are cumulative registrations, not new sales during the first half of the year, highlighting the scale of the country’s existing hybrid fleet, according to the FTI report Adjusts 2026 Automobile Production Target.
But BEVs are growing faster. Data compiled by the Japan External Trade Organization (JETRO) from Thailand’s Department of Land Transport show that new BEV registrations across all vehicle categories reached 168,694 in January-August 2026, up 82.2% year on year.
New hybrid registrations reached 116,207 over the same period, up 23%. Both segments are expanding, but the figures alone do not reveal which technology will prevail. Automakers must meet shifting consumer demand while weighing different production costs, tax incentives and emissions requirements.
The Supplier Network Behind the Policy
Thailand has spent decades attracting manufacturers such as Toyota and Honda and building a network of component suppliers around them.
A rapid shift to BEVs would change the components, skills and supplier networks that this base depends on. Conventional hybrids, by contrast, still need combustion engines, transmissions and other traditional parts.
They also need electric motors and batteries. Supporting their production therefore preserves much of the existing supply chain while drawing investment into electrification. The government is also courting BEV makers. Its incentive programmes require them to produce locally to offset vehicles imported under certain subsidy schemes.
Hybrids offer a route to lower emissions without requiring drivers to rely entirely on charging infrastructure, although their environmental benefits vary with fuel consumption, driving conditions and the way electricity and fuel are produced. The new import tax rules, which still await Cabinet approval, will show how far this balance can hold.
