Thailand’s electric vehicle (EV) industry is entering a pivotal new phase. On 25 November 2025, the National Electric Vehicle Policy Board—chaired by the Deputy Prime Minister and Minister of Finance—approved several strategic updates to the EV 3.0 and EV 3.5 incentive schemes. These changes aim to balance rapid EV adoption with long‑term industrial sustainability, ensuring Thailand remains competitive as a global EV manufacturing hub.

As the country prepares for the transition from EV 3.0 to EV 3.5 in 2026, understanding the new requirements and incentives is essential for manufacturers, importers, and supporting industry stakeholders.

Why the Policy Shift Now?

Thailand has seen exceptional momentum in EV uptake. Between January and September 2025, EV registrations surged 59% compared to the same period in 2024. As of 31 October 2025, a total of 238,000 EVs have been registered under the EV 3.0 and EV 3.5 programs, reflecting 140 billion THB in cumulative investments from 32 EV 3.0 and 11 EV 3.5 manufacturers.

However, rapid expansion has also created concerns around oversupply, local production capacity, and long‑term competitiveness—particularly against low‑cost imports from China. The latest policy adjustments are designed to balance demand with stronger domestic manufacturing capabilities.

Key Changes to EV 3.0 and EV 3.5 Incentives

1. Extended Registration Deadlines

Manufacturers now have additional time to register EVs with the Department of Land Transport (DLT):

• EV 3.0: Extended from December 2025 → January 2026
• EV 3.5: Extended from December 2027 → January 2028

This extension supports year‑end sales and helps ease administrative bottlenecks.

2. New Conditions for Subsidy Payments

To ensure manufacturers honor their local production commitments, subsidy disbursements from the Excise Department will be delayed if production targets are not met.
Goal: Reduce risks of shortfalls in domestic production.

3. Increased Flexibility for Production Facilities

Manufacturers participating in EV 3.0 may now include partner factories from the EV 3.5 scheme in their production contracts—providing additional pathways to meet local manufacturing requirements.

4. Updated Local Content Rules for Batteries

Thailand is tightening its local content framework to accelerate domestic battery manufacturing:

• Imported battery cells can continue to count toward local content until 30 June 2026 (extended by 6 months).
• Beginning 1 January 2026, only 10% of an EV’s factory price can come from imported cells (reduced from 15%).

This shift supports Thailand’s goal of developing a competitive local battery ecosystem.

5. Operational Guidelines for Hybrid Electric Vehicles (HEVs)

HEV manufacturers face clearer, more rigorous requirements:

CO₂ Emissions & Labeling

• Vehicles must undergo CO₂ testing and display results on the ECO label.

Local Content and Technical Requirements

• Must use medium or high‑value HEV parts.
• Batteries must be produced locally at least via Pack Assembly.
• Manufacturers must operate a local engine factory or use 4 out of 5 key Thai‑made components or achieve 40% local content per MOI rules.
• Required to establish an R&D center with ≥75% Thai staff.

Safety & ADAS Testing

• Mandatory ADAS testing at ATTRIC, including:
  • Car‑to‑Car Rear Stationary
  • Lane Keeping
  • Lane Departure Warning (LDW)
  • Blind Spot Detection (BSD)

6. Incentives for EV Exports

To discourage domestic oversupply:

• Each EV exported counts as 1.5 units toward local production commitments.
• Export deadlines and proof-of-export submissions extended by 6 months, to 30 June of the following year.

7. Option to Remove Certain Vehicles From Production Commitments

Manufacturers may remove imported EVs from their local production obligations if they:

• Have not yet received subsidies, and
• Pay the required excise tax shortfall, penalties, and surcharges.

This provides manufacturers more flexibility in aligning with market demand and production capacity.

What This Means for Manufacturers

The transition from EV 3.0 to EV 3.5 will have significant commercial implications:

• Reduced Subsidies:
  EV 3.5 offers a maximum subsidy of 100,000 THB per unit, compared to 150,000 THB under EV 3.0.

• Higher Local Production Requirements:
  EV 3.5 emphasizes stronger local manufacturing, increasing both capital and operational costs.

• Potential Price Increases:
  Lower subsidies combined with higher local production costs may raise EV retail prices, potentially leading to short‑term demand softening.

• Competitive Pressures:
  With China’s EV oversupply driving down export prices, Thailand’s cost gaps may widen, pressuring local manufacturers—some of whom may exit the market.

• Shift Toward Hybrids:
  Clearer HEV regulations and improving cost competitiveness may drive consumer and manufacturer interest toward hybrid models.

EV 3.5 Incentive Overview (Selected Highlights)

What Companies Should Do Now

Regulatory shifts can be complex—and the stakes are high. Businesses operating in the EV ecosystem should:

• Conduct a gap analysis against new EV 3.5 requirements
• Reassess production timetables and subsidy eligibility
• Reevaluate supply chains for local content compliance
• Review export strategies in light of the new 1.5‑unit production credit
• Ensure proper classification, origin determination, and FTA qualification for components and finished vehicles

The Tradewin team is available to provide support across areas such as HS classification, import/export licensing, origin rules, and incentive optimization. Contact us today to learn more.