Does Thailand’s new electric vehicle policy affect Battery Electric Vehicle (BEV) adoption?

Abstract

Transportation accounted for about 27 per cent of the total Greenhouse gas emissions in the United States. The shift from Internal Combustion Engine vehicles (ICEs) to a cleaner vehicle type such as Battery Electric Vehicles (BEV), could potentially reduce the air pollution and Greenhouse gases released into the atmosphere, thus, slowing down the pace of global warming. However, most people still have doubts on the reliability and prices of the BEVs. Many governments in developed countries such as Norway have proved that government incentives policy can be used to incentivize the BEV adoption. This paper analyzes particularly on the case of Thailand’s EV incentives policy, including both non-monetary and monetary incentives policy such as a reduction of import duty and excise tax, 18,000 Baht to 150,000 Baht subsidy, and exemption of import duties on electrical components. In addition, the Ordinary Least Square method was used in this paper to analyze whether the EV incentives policy and other relevant factors could lead to a higher number of new BEV registered or not. It was concluded that the EV incentives policy is associated with an increase in new BEV adoption by 40-65 per cent. Other relevant factors such as oil prices appear to have statistically significant predictive power for the adoption of BEV in Thailand; a 1 per cent increase in diesel price per liter is associated with a 1.3 per cent increase in the number of new BEV registered monthly, and 1.65-2.16 per cent for a 1 per cent increase in Benzene price per liter. Meanwhile, lending interest rate, median household income, and the number of charging stations do not seem to be statistically significant to affect the new BEV adoption.