Yuanta Securities (Thailand) wrote that the Thai government is currently considering an adjustment to the excise tax structure for electric vehicles. The proposed measure would result in higher import duties for EVs that do not have a domestic manufacturing base in Thailand. In contrast, companies that establish production facilities and utilize the local supply chain would be granted additional tax incentives.
The draft policy is expected to be submitted to the Cabinet for consideration by September 2026. Industry stakeholders, particularly in the auto parts sector, have recommended increasing the tax differential between imported and locally produced EVs to at least 30–50%, up from the current level of approximately 8%. This information is based on the Ministry of Finance and the Automotive Industry Group, according to Yuanta.
From an investment perspective, the brokerage views this development as a positive sentiment for auto parts stocks. The proposed policy is anticipated to enhance the competitiveness of domestically produced vehicles and incentivize EV manufacturers—especially Chinese firms—to expand their investments and operations in Thailand, thus increasing the use of local supply chains.
This, in turn, could result in greater order opportunities for Thai auto parts manufacturers. However, as specific details regarding tax rates, local content requirements, and the implementation timeline remain unclear, Yuanta has not yet factored these potential benefits into its earnings forecasts.
In the mid-term, Yuanta identifies AH, SAT, STANLY, and EPG as beneficiaries of the expected localization trend within the EV industry. Both AH and SAT have already started receiving some EV component orders, though the contribution to overall revenue remains modest. STANLY has yet to secure EV-related orders, but there is potential for increased business as Japanese automakers continue to expand their EV production bases in Thailand.
Companies such as Toyota, Honda, and Isuzu have already established local battery electric vehicle production, while Mitsubishi is reported to be planning further investment and feasibility studies for EV manufacturing in the country. These developments are likely to create additional opportunities for local parts suppliers.
Conversely, Yuanta sees a negative impact on the sentiment for MPC and ASAP, which currently rely on importing EVs for domestic sale. However, the outlook for KGEN remains positive as the company maintains a production base within Thailand and holds direct equity interests in domestic factories.
Among the sector, Yuanta selects Somboon Advance Technology (SAT) as its top pick, noting that the current share price has already factored in significant industry weakness. The analyst expects earnings to recover alongside a rebound in domestic auto production and new order flows, with further upside potential should automakers increase their use of locally-produced components under the new localization policy. As a result, Yuanta maintains a ‘Buy’ recommendation on SAT with a target price of THB 18.80 per share.
