Electric vehicle (EV) importers participating in the Thai government’s subsidy programme are required to return any subsidies received if they fail to comply with the conditions, says Deputy Finance Minister Paopoom Rojanasakul.
Neta Auto Thailand, which produces battery EVs locally under the Neta brand, may be required to pay more than 2 billion baht back to the government if it fails to meet targets, according to media reports.
“This issue needs to be considered by a new team of executives because it is a recent development and the amount of money is very high,” a company sponesman told the Bangkok Post on Wednesday.
Hozon Auto, the Chinese parent company of Neta Thailand, is restructuring its management teams as it tries to resolve financial problems, which could include converting debt to equity, as well as raising funds.
Government subsidies were tied to a condition to build an EV manufacturing plant within Thailand to eventually replace imports. If a company cannot meet this requirement, it must return the funds, Mr Paopoom said on Wednesday.
Under Phase 2 of the government’s EV promotion programme, from 2024-27, subsidies to support EV usage are distributed through importers to be passed on to car buyers.
Passenger cars and pickups receive a subsidy of up to 100,000 baht per unit, while motorcycles are entitled to a subsidy of up to 10,000 baht per unit.
The government also reduced import duties on completely built-up EVs to a ceiling of 40% for 2024-25, and reduced the excise tax to 2% from the original rate of 8%.
Automakers participating in this scheme must establish a factory to produce EVs domestically, noted the Ministry of Finance.
As well, companies have to produce vehicles domestically to compensate for imports at a ratio of two locally produced battery EVs (BEVs) for every imported vehicle by 2026.
If participants cannot meet this production target, they must compensate at a ratio of three locally produced BEVs for every one imported vehicle in 2027.
In the case of Neta, Sun Baolong, head of Southeast Asia business for Hozon Auto, previously assured Thai customers of continued production and sales, predicting the financial struggles would be resolved in the near future.
Neta opened a new parts distribution centre in Nakhon Pathom last month to improve after-sales service.
The company has been selling cars in Thailand since 2022 and collaborated with Bangchan General Assembly to commence the assembly of BEVs here in March 2024, becoming the company’s first BEV plant outside China.
Annual production at the plant is 10,000 units.
As of May this year, the company had sold cars to about 25,000 Thai customers.