In brief

From 2026, pure battery electric vehicles (BEVs) must be equipped with certain levels of advanced driver-assistance systems (ADAS); otherwise, excise tax rates will be higher.

The Royal Gazette has published several notifications of the Excise Department regarding BEVs recently. These include the "Notification of Excise Department on Rules and Conditions of Energy-Saving Type Electric Powered Passenger Cars or Passenger Cars with 10 Seats or Less" and the "Notification of Excise Department on Rules and Conditions of Electric Powered Pick-up Trucks" ("Notifications"). The Notifications have introduced the ADAS requirements as a new condition to apply lower excise tax rates on BEVs along with detailed requirements on the use of domestically manufactured batteries.

In brief, ADAS are technological features that assist the drivers by using sensors, such as radars and cameras equipped in the vehicle, to provide assistive driving information or, when combined with a set of programs or AI, take specific automatic driving actions in response to the information perceived by the sensors. As discussed in our previous article, a variety of ADAS are being developed and utilized as building blocks for the realization of autonomous vehicles. Not only BEVs, other types of vehicles can also be equipped with ADAS.

According to the public announcement made by the Minister of Finance earlier this year, in order to encourage automakers to equip ADAS in vehicles for higher safety standards, the adoption of ADAS as another criteria to determine excise tax rates was under consideration. The criteria are now clear after the issuance of the Notifications.

Summarized below are the requirements of ADAS to determine excise tax rates for BEVs.

ADAS prescribed under the Notifications

1.

Advanced emergency braking system (AEB)

2.

Forward vehicle collision warning systems (FCW)

3.

Lane keeping assistance systems (LKAS)

4.

Lane departure warning systems (LDW)

5.

Blind spot detection (BSD)

6.

Adaptive cruise control (ACC)

Requirements of ADAS

For BEV passenger cars or BEV passenger cars with 10 seats or less: From 1 January 2026, the vehicles must be equipped with at least 4 out of 6 prescribed ADAS in order to be eligible to the excise tax rate of 2%. Otherwise, the excise tax rate of 10% will apply.

For BEV pick-up trucks: From 1 January 2026, the vehicles must be equipped with at least 2 out of 6 prescribed ADAS in order to be eligible to the excise tax rate of 2%. Otherwise, the excise tax rate of 10% will apply.

With ADAS, EVs will undoubtedly be safer and more convenient to drive. EV makers who wish to be eligible for lower excise tax rates should prepare to comply with the prescribed conditions.