Thailand's Ministry of Industry, with the backing from the cabinet, is on full support for the country to slowly switch to the usage of electric vehicles (EV), said Industry Minister Suriya Jungrungreangkit on Thursday at the Government House.

"For the sake of clean energy and a green environment, our government is looking into offering additional cuts on tariff and excise tax to boost the use of electric vehicles and also create an EV manufacturing regional hub in Thailand," said the minister.

Wider adoption of EVs would help reduce air pollution, especially harmful PM 2.5 particles, he added.

Suriya said that various EV-manufacturing investors have already applied for privileges with the Board of Investment (BOI), but attributed one major hurdle to the high battery price.

The battery for EVs is too expensive for consumers, admitted Suriya Jungrungreangkit, adding that just the battery itself costs half the total price of an EV.

Currently, Thailand does not have the resources to manufacture batteries, so drawing foreign investors was difficult, Suriya admitted.

Therefore, the solution to boosting use of electric vehicles was to cut tax on EVs and parts, he added.

EVs could be imported either as finished vehicles or as parts to be assembled in Thailand, he said.

However, if there is a rise in domestic demand, then perhaps it may prompt investment in EV parts manufacturing and charging stations, Suriya said.

The minister also said that in order to make Thailand become an EV production hub, the Thai government must convince investors to shift gear from manufacturing combust-engine vehicles to producing different types of EVs.

Over the past three years, the BOI has approved 13 EV-production projects with a combined capacity of 125,000 electric vehicles per year and total investment of about 156 billion baht (5 billion U.S. dollars).

The BOI is now considering extra incentives for EV production of pick-ups, buses, motorcycles, three-wheel vehicles and others, he said.

Existing incentives include waiving the eight percent excise tax rate until 2023, then collecting just 2 percent from 2024 to 2025.