Carmakers are ready to splurge on electric vehicles (EVs), particularly on hybrid models, but have urged the authorities to find ways to make them more affordable.
Ninnart Chaitharapinyo, vice-chairman of Toyota Motor Thailand, said yesterday the company is ready to move into hybrid electric vehicle (HEV) production in the country, and is scheduled to disclose its corresponding investment plan within the next 12 months.
"Toyota is looking forward to exporting HEVs from Thailand in the future," he said. "Toyota's EV production plan will focus largely on HEV models, as PHEVs (plug-in hybrid electric vehicles) and BEVs (battery electric vehicles) require higher technology."
Mr Ninnart said the HEV segment is promising given the massive number of units sold globally.
Some 1.4 million HEVs were sold worldwide last year, compared with only 150,000 units of PHEVs and 275,000 BEVs.
Mr Ninnart said the company is also conducting a feasibility study to establish its own local battery manufacturing facility to serve Toyota's HEV production in the long run.
But he said Toyota would rather make nickel-metal hydride batteries (NiMH), as it does in Japan and China.
"NiMH batteries are not yet an out-of-date technology although other carmakers prefer lithium-ion batteries," said Mr Ninnart.
Morikazu Chokki, president and chief executive of Mitsubishi Motors Thailand, said Mitsubishi is also keen on the EV scheme, but said its Japanese parent company first needs to carefully consider and consult with its EV suppliers before making a decision in 2018.
He said PHEVs seem to match up with the Thai government's EV promotion plans, adding BEVs still need related infrastructure such as charging stations, an area in which Thailand is far from ready.
"Mitsubishi itself is also very interested in PHEVs globally due to technological considerations," he said.
Mr Chokki said the EV scheme is unlikely to negatively affect current eco-car production as there are separate buyers for the two segments, while EV prices are still relatively higher than conventional vehicles.
Meanwhile, the cabinet yesterday approved additional measures, including a steep excise tax cut for EVs, to stimulate domestic demand.
Industry Minister Uttama Savanayana said the excise tax for HEVs and PHEVs will be cut to 5% from 10%, while the one levied on BEVs that release CO2 emissions below 100 grammes per kilometre will be cut to just 2%.
But such tax cuts will only be offered conditionally on manufacturing projects approved by the Board of Investment (BoI) and apply to batteries that are made or assembled in Thailand from the fifth year onwards.
The excise tax cuts come in addition to the promotional privileges for EVs rolled out by the BoI last Friday.
The BoI's privileges, focusing on production of HEVs, PHEVs and BEVs, include tax holidays of 5-8 years.
The scheme includes passenger cars, pickup trucks and buses, with different rates of privileges based on production technology.
The cabinet also yesterday approved a raft of measures to be offered by various ministries to support electric car production in Thailand.
The government estimates that EVs are expected to total 2-3% of new cars over the next five years.