The Thai government will extend the deadline for electric vehicle (EV) makers to meet local production targets, the Board of Investment said on Wednesday.

Currently, the EV 3.0 incentive programme requires companies to produce one EV locally for each vehicle that they imported earlier.

For companies that do not meet the 1:1 target this year, the ratio of local output will rise in 2025 to 1.5 vehicles for each one imported.

The policy was intended to encourage more EV makers to apply for incentives to set up local assembly plants. As a result, investment in EV and related parts manufacturing has reached about 80 billion baht.

The BoI said that local EV producers would now have until the end of 2027 to comply with local-output targets.

The measures are the latest to support a struggling automobile sector that faces a grim future due to a stagnant domestic market at a time of tepid economic growth and tight credit conditions.

The Federation of Thai Industries (FTI) recently revised down its domestic car manufacturing target for 2024 from 1.7 million units to 1.5 million, which would be the lowest since 2021, as car sales in the domestic market remain weak.

In the first 10 months of this year, total car sales (conventional and EV) declined by 26.2% year-on-year to 476,350 units. Pickup sales were down 43%.

The plunge has been attributed to banks’ stricter criteria for granting auto loans for fear of bad debt as the country is struggling to deal with the high level of household debt.