SE Asia Braces for Boom in EVs

Southeast Asia is scrambling to prepare for a major shift in its car markets from piston to battery power, the Financial Times says.

But the London-based newspaper notes that the level of electrification of fleets in the region will depend heavily upon the global plans by the biggest carmaker investors there: Honda, Isuzu and Toyota.

Indonesia, the region’s largest market, says it plans to ban the sale of gasoline and diesel engines by 2040. The declaration follows similar announcements by China, France and the U.K.

The country also is developing a policy that would slash import tariffs and the luxury tax on EVs from 50% today to 5% as soon as 2018, FT reports. The reduction would apply only to carmakers who commit to eventual EV production in Indonesia.

Thailand has already implemented an 8-year income tax exemption for companies that invest in local production of all-electric cars. Carmakers qualify for a 3-year exemption for plug-in production, according to FT.

Thai manufacturers can extend their tax breaks for as long as 10 years if they add domestic production of such components as batteries and motors. Thailand also has waived import taxes on machinery used to make electric cars and their components.

Philippines’ government is considering legislation that would exempt excise duties on EVs and any plug-in that can travel at least 30 km in all-electric mode.