# Chinese EV expansion and Thai policy response > Live situation record from CLSTR: https://clstr.news/situations/chinese-ev-expansion-in-southeast-asia > Updated: 2026-08-17T02:59:49.000Z. Sources: 28. Developments: 5. By mid-August 2026, Thailand’s automotive sector faced deepening structural challenges. While EV sales increased, domestic factory utilization rates dropped to approximately 60%, and local content rates fell to 30% due to a heavy reliance on imported Chinese components and technology. Industry leaders warned that without stable policies focused on technology transfer, major manufacturers like Toyota might relocate production to Indonesia, which is actively courting investment. In response to these pressures, the Thai government announced plans to restructure its automotive excise tax, with details expected by September 2026. Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas has directed officials to finalize the new rules by September, aiming for implementation before the end of the year. The goal is to protect the domestic manufacturing base by lowering tax rates for vehicles produced within Thailand—including petrol, diesel, plug-in hybrid, and battery electric models—provided manufacturers invest in local factories and source domestic parts. Conversely, fully imported (CBU) models from manufacturers without local production facilities are expected to face higher taxes to offset competitive disadvantages caused by Free Trade Agreements. Amidst these shifts, Honda has lobbied the government to reduce import taxes on Japanese-built cars to achieve parity with electric vehicles from other nations. Honda CEO Koji Iwanami noted that high duties make it difficult to price Japanese models competitively against other imports. While Honda’s Prachinburi plant is nearing its current 110,000-unit capacity, the company intends to expand capacity to 150,000 units annually and increase the number of models produced locally. ## Claims - Thailand is planning to restructure vehicle excise taxes to favor locally produced cars over fully imported models. (corroborated by 4 sources) - The new tax regulations are expected to be finalized by September 2026 and implemented before the end of the year. (corroborated by 3 sources) - Indonesia has invited Toyota to move its regional manufacturing base from Thailand to Indonesia. (corroborated by 3 sources) - Honda has requested the Thai government to reduce import taxes on Japanese-built vehicles to improve price competitiveness. (corroborated by 2 sources) - Honda's Prachinburi plant is currently operating near its maximum capacity of 110,000 units per year. (corroborated by 2 sources) - Honda plans to increase the Prachinburi plant capacity to 150,000 units per year. (corroborated by 2 sources) ## Timeline ### 2026-08-17: Thailand plans automotive tax reform to protect local manufacturing Thailand is planning automotive tax reforms to favor local production over imports, responding to competition from Indonesia and requests from manufacturers like Honda to adjust import duties. 12 sources. https://clstr.news/cluster/thailand-to-restructure-automotive-excise-tax-by-july-2026 ### 2026-08-14: Thailand automotive sector faces risks from Chinese EV dominance and supply chain shifts Thailand's automotive sector faces instability as high import rates for Chinese EV components and low local content threaten domestic manufacturing, while China's trade growth masks weak internal demand. 2 sources. https://clstr.news/cluster/thailand-automotive-sector-faces-risks-from-chinese-ev-dominance-and-supply-chain-shifts ### 2026-07-31: Chinese EV surge reshapes Thailand and Vietnam auto markets Chinese EVs are gaining 25% global share, pressuring Thailand's auto sector and prompting Chery to launch the REEV iCaur V27 SUV in Vietnam, signaling a shift in Southeast Asian automotive markets. 2 sources. https://clstr.news/cluster/chinese-ev-surge-reshapes-thailand-and-vietnam-auto-markets ### 2026-07-24: Thailand accelerates EV push as Chinese electric cars flood market Thailand's auto industry faces pressure from cheap Chinese EV imports and seeks tax breaks for local parts while the government reviews a 24 bn‑baht aid plan to replace 80 000 gasoline vehicles with electric, a 2 sources. https://clstr.news/cluster/thailand-accelerates-ev-push-as-chinese-electric-cars-flood-market ### 2026-07-05: Indonesia’s EV Market Grows with New Affordable Chinese Models and Local Launches Indonesia sees a surge in EV sales as Chinese models under Rp250 million launch, long‑range BYD cars hit the market, iCAR’s customizable V23 arrives, MG delivers 1,000 S5 EVs, while Delhi plans a 2028 gasoline‑ 10 sources. https://clstr.news/cluster/chinamade-evs-hit-indonesian-market-with-models-below-rp250-million-and-longrange-options --- Cite as: Chinese EV expansion and Thai policy response. CLSTR, https://clstr.news/situations/chinese-ev-expansion-in-southeast-asia