Authorities in Thailand are addressing contractual breaches linked to state-backed investment commitments within the electric vehicle incentive framework.

The Excise Department is coordinating with the Chinese Embassy to negotiate with a state-owned enterprise in Zhejiang Province, a shareholder of the electric vehicle company Neta, regarding the fines imposed.

Mr. Pornchai Theeravech, Director-General of the Excise Department at the Ministry of Finance, stated that the department is monitoring developments and working with the Chinese Embassy in negotiations with the Zhejiang-based state-owned enterprise, which holds shares in Neta. The company had initially planned to invest in electric vehicle production in Thailand by contracting local manufacturers; however, no such arrangements were concluded.

The Thai Government, through the Excise Department, had previously paid compensation to Neta at a rate of THB 150,000 (US$ 4,750) per vehicle under measures introduced to promote the adoption of electric vehicles, including electric cars and motorcycles. However, the company did not fulfil the agreed conditions. The Excise Department has initiated legal proceedings and imposed a fine equivalent to twice the value of the damages. The total amount of the fine is currently being calculated.

The measures to promote electric vehicles in Thailand are intended to support domestic adoption and manufacturing. These measures are divided into two phases. The EV3.0 initiative, covering the period from 2022 to 2025, provides subsidies of up to THB 150,000 per vehicle, together with reductions in import duties and excise taxes.

The EV3.5 initiative, effective from 2024 to 2027, provides subsidies of up to THB 100,000 per vehicle for electric cars and pick-up trucks, and THB 10,000 for electric motorcycles. A total of 32 companies participated in the EV3.0 initiative, while 11 companies participated in the EV3.5 initiative.

The electric vehicle market in Thailand recorded price competition among manufacturers. By 2025, growth of more than 74% compared with 2024 is projected. This trend is expected to continue, based on projections related to vehicle efficiency and emissions considerations.