EV promotions adjusted to address glut

Sluggish market requires a shift

- WICHIT CHANTANUSORNSIRI

The government is stepping up efforts to adjust the conditions of electric vehicle (EV) promotion measures to address a potential oversupply.

Government subsidies provided to EV manufacturers who import and sell EVs domestically, which are passed on to buyers, require manufacturers to establish local EV production facilities to compensate for imports.

For instance, under the EV 3.5 scheme, by 2026 manufacturers must produce twice the number of EVs domestically to offset imports, and by 2027, this requirement increases to three times the imported amount.

If these conditions are not met, the subsidies received must be returned to the government.

However, in setting the requirement for domestic production to offset imports, the government did not anticipate competition in the EV industry would intensify, flooding the market with EVs and precipitating a price war.