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Bangkok Post
Bangkok Post
Business

EV battery subsidies head to cabinet soon

An EV prototype is displayed at a Sustainability Expo. A state official considers EV battery manufacturing promotion urgent. Pattarapong Chatpattarasill

The Industry Ministry plans to ask the cabinet to approve an incentive package for electric vehicle (EV) battery production before dissolution of the House of Representatives this month.

It is not known when officials will forward the package proposal to the cabinet, which meets every Tuesday, but according to Warawan Chitaroon, director-general of the Office of Industrial Economics, the cabinet is expected to give a final say "within 1-2 weeks".

The National EV Policy Committee earlier agreed in principle on the proposal to lower the excise tax on EV batteries from the current 8% to 1%, while offering a 24-billion-baht subsidy for EV battery production.

Mrs Warawan said EV battery manufacturing promotion is considered an urgent issue because it has drawn much attention from potential investor companies.

"Foreign investors have asked state agencies, especially the Board of Investment, about the package details," she said.

Among them are automakers interested in building EV battery factories to support their EV assembly plants, said Mrs Warawan.

The subsidies for battery producers will be based on "a first-come, first-served basis," Energy Minister Supattanapong Punmeechaow, who chairs the National EV Policy Committee, said earlier.

The level of the subsidy, which aims to support the manufacturing of battery cells, will depend on the size of the battery produced.

A producer of an EV battery with less than 8-gigawatt hours (GWh) capacity will receive a subsidy of between 400 baht and 600 baht per kilowatt-hour (kWh), while a factory making an EV battery of 8GWh or more will receive between 600 baht and 800 baht per kWh.

The subsidy should help reduce the prices of EV batteries and EVs overall, which will eventually boost the country's EV manufacturing industry, according to Mr Supattanapong.

According to a source at the Energy Ministry who requested anonymity, some car manufacturers raised doubts over the incentive package, feeling the battery specifications in the subsidy conditions were too strict.

Batteries used in the Thai EV market have lower specifications.

"The government wants to encourage world-renowned battery cell manufacturers to invest in Thailand," the source said, adding that many car companies are only battery module makers.

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