Leading Japanese carmaker Toyota Motor Corporation is set to be the first Board of Investment (BoI) applicant for privileges to make electric vehicles (EVs) locally.
According to a source at Government House, Toyota's 19-billion-baht investment plan to produce hybrid electric vehicles (HEVs) in Thailand is scheduled to go before the BoI for approval today at a meeting chaired by Prime Minister Prayut Chan-o-cha.
According to the source, who asked not to be named, the automaking giant is expected to kick off HEV production this year.
The BoI in March approved promotional privileges for EVs, including tax holidays of 5-8 years. The privileges focus on production of HEVs, plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).
The promotions include passenger cars, pickups and buses, with different privileges based on production technology.
HEVs are entitled to a tariff exemption for imported machinery, while PHEV investment is eligible for a corporate income tax exemption for three years and import tariff exemptions on machinery.
PHEV investors who manufacture more than one key EV part will be entitled to an additional year of corporate income tax exemption per piece, but the combined tax exemptions cannot exceed six years.
BEV investment is entitled to 5-8 years of corporate tax exemption.
BEV investors who make more than one key EV part will be entitled to another year of tax exemption per piece, but the combined exemption cannot exceed 10 years.
The deadline to submit an application to the BoI for HEVs is Dec 29, while the deadline for PHEVs is the end of 2018.
The source said Toyota's investment plan is one of the five big-ticket projects worth a combined 120 billion baht that are scheduled to go before the BoI for approval today.
But Toyota Motor Thailand denied giving any more details about the new investment plan, saying only that the company is waiting for the BoI's announcement on its HEV project.
Last Thursday, Toyota declared at its mid-year press conference that Thailand is one of the global production hubs for compact cars, including Toyota's future HEVs.
Michinobu Sugata, the newly appointed president of Toyota Motor Thailand, said the company wants to develop the Thai market with high-tech and eco-friendly vehicles like EVs, as it has successfully done in Japan and the US.
Mr Sugata said HEVs can be fundamental to developing more advanced EVs like PHEVs and BEVs.
At present, there are only three Japanese carmakers that have localised their HEV platforms: Toyota, Honda and Nissan. Those companies' models are the Camry, Accord and X-Trail, respectively.
Toyota used to assemble the popular Prius HEV at its facility in Chachoengsao, but production has been suspended since August 2015.
HEV cars have been available in the Thai market since 2009, with an accumulated 73,611 units sold as of last year, representing just 1% of the total car market.
Toyota Motor Thailand chairman Ninnart Chaithirapinyo said Toyota plans to not only produce a large number of HEVs in Thailand, but also provide waste management facilities for batteries and wrecked vehicles to support future HEV development, which is expected to kick off around October.