Is the Petrol Car Era Ending? Thailand Prepares Major EV Transition Package
Jakarta, CNBC Indonesia – The golden age of petrol and diesel vehicles appears to be drawing to a close. Thailand, long known as the largest automotive industry hub in Southeast Asia, is preparing a major step to accelerate its transition to electric vehicles (EVs).
The Thai government is studying an assistance package worth 24 billion baht, or around US714million(Rp11.6trillionatanexchangerateofRp16, 300/US), to replace up to 80,000 old oil-fuelled vehicles with electric ones. The programme initially targeted only public and commercial transport vehicles such as taxis, motorcycle taxis, tuk-tuks, buses and lorries, but it has now been extended to all categories of electric vehicles, including private cars.
“We are considering whether this assistance needs to be extended to all vehicle categories, not just public transport vehicles,” said Thai Deputy Transport Minister Siripong Angkasakulkiat, quoted by Reuters on Friday (24/7/2026).
The support measures being prepared by the government are varied, ranging from purchase subsidies and low-interest loans to tax incentives for vehicles eligible for replacement based on age. The move forms part of Thailand’s energy transition strategy as well as an effort to rescue the country’s automotive industry, which is under pressure.
As Southeast Asia’s largest automotive production base, Thailand is facing a sharp decline in domestic vehicle sales. In 2024, car sales plummeted to their lowest level in 15 years due to high household debt and tight credit lending, particularly in the pickup segment that has been the backbone of the country’s automotive industry.
Data from the Federation of Thai Industries shows domestic car sales throughout 2025 reached 621,166 units, including 120,301 passenger EVs. In addition, around 1.7 million motorcycles were sold over the past year.
In recent years, the Thai government has aggressively offered various incentives to attract EV investment. The policy has successfully drawn investments exceeding US$4 billion (around Rp65.2 trillion), including from Chinese automotive manufacturers such as BYD and Great Wall Motor.
However, the current EV incentive policy will expire in 2027. Industry players are urging the government to promptly introduce a new scheme so that the growth momentum of electric vehicles does not stall.
Surapong Paisitpattanapong, spokesperson for the Automotive Industry Club of the Federation of Thai Industries, said new incentives should focus on electric vehicles produced domestically with a high proportion of locally sourced components. According to him, the greater the local EV production, the greater the economic benefits Thailand would gain through job creation, higher public income and additional tax revenue.
In addition, the government is also considering special assistance for taxi drivers who must replace fleets older than ten years starting next year. Under the scheme, EV instalment payments are projected to fall to around 500 baht per day from the previous level of around 700 baht per day over five years.
It is not only passenger cars: the government is also drafting incentives for electric minibuses, vans, buses, tuk-tuks and heavy goods vehicles. Thai Finance Minister Ekniti Nitithanprapas even revealed that the programme will also cover the replacement of pickup trucks with electric vehicles or models capable of running on B20 biodiesel.
If realised, Thailand’s move would be one of the strongest signals that the era of fossil-fuelled vehicles in Southeast Asia is beginning to shift towards electric vehicles. The country known for decades as the “Detroit of Asia” is now accelerating its transformation towards a clean energy-based automotive industry.