Spurred by growing domestic demand for electric vehicles (EV), manufacturers in Japan and China are set to seek government subsidies to cut EV prices in Thailand, according to a finance ministry source.

Toyota is expected to join the Excise Department’s subsidy programme later this month, the source said.

“It will be the first Japanese car manufacturer to take part. This move is expected to prompt other carmakers from Japan and Europe to join so that they can avoid missing out on business opportunities,” the source added.

Chinese automakers Geely, Neta and Changan have also expressed interest in the subsidy programme and are in talks with the Excise Department, according to the source.

Meanwhile, Japanese carmaker Honda will likely postpone its participation until next year as it prepares its EV assembly operation in Thailand, the source said.

The Excise Department is offering subsidies ranging from 70,000-150,000 baht ($2,100-4,500), depending on the size of battery used.

The subsidies are already being applied to cars offered for sale by Chinese brands such as MG, Haval and Ora – both completely knocked down (CKD) and completely built-up (CBU) models. Under the subsidy deal, carmakers can import CKD and CBU units for sale for two years. In the third year, they must make one unit in Thailand for every unit they import. That ratio rises to 1.5:1 in the fourth year.

Failure to meet those terms will be penalised with fines and additional import and excise taxes.

The Excise Department sees signs of increased interest in EVs among Thai consumers, said director-general Lavaron Sangsnit.

He pointed out that 3,000 EVs were reserved at the latest Thailand Motor Show, representing 10 per cent of all bookings made at the expo, which finished on April 3.

“This was a very good sign. We believe the momentum is quickly going in this direction,” he said.

The National Electric Vehicle Policy Committee headed by energy minister Supattanapong Punmeechaow will visit Japan early next month for talks with Japanese carmakers about potential investment in EV manufacturing in Thailand, Lavaron said.