Thailand plans to offer tax incentives for plug-in hybrid vehicle manufacturing, with the changes set to take effect from 2026 if approved, deputy finance minister Paopoom Rojanasakul said on March 10th.

Under the plans, tax collection would be based on the travel range per battery charge for a vehicle, with lower taxes for a longer travel range, Paopoom said, adding that the proposal would be sent to the cabinet by April.

Thailand is Southeast Asia's largest automotive production hub and an export base for some of the world's top automakers, including Toyota and Honda, but the industry is experiencing a major slump.

Auto production in Thailand fell by a tenth last year to a four-year low, with domestic sales and exports declining by 26% and 8.8%, respectively.

Chinese EV makers such as BYD and Great Wall Motors have invested more than US$ 3 billion in facilities in Thailand, and their deep discounts are also putting pressure on competitors in a sector that accounts for 10% of GDP.

Japanese brands, including Toyota, have been in discussions with the government regarding a trade-in programme to stimulate sales, the press reported last month.

The Finance Ministry also plans to introduce credit guarantees for pick-up truck buyers, Paopoom said, with those measures expected to be rolled out before the annual motor show at the end of March.