Massive Price Cuts on Hybrid Cars Kickstart Vietnam’s Green Vehicle Race in 2026

The Vietnamese automotive market is heating up as multiple car manufacturers gear up for a new growth phase in fuel-efficient vehicles.

Significant Tax and Fee Reductions Starting January 1, 2026

The amended Special Consumption Tax Law, passed by the National Assembly on June 14, 2025, marks a pivotal moment for gasoline-electric hybrid vehicles. From January 1, 2026, all hybrid vehicles, including self-charging (HEV) and plug-in (PHEV) models, will be subject to a special consumption tax rate of only 70% compared to their gasoline counterparts.

Currently, only PHEVs enjoy this benefit, while HEVs face the same tax rates as traditional gasoline vehicles. Once the new policy takes effect, hybrid car buyers can save from tens to hundreds of millions of VND, thanks to reduced taxes and fees.

For instance, an HEV model with an import price of 1 billion VND currently incurs a 50% special consumption tax (500 million VND), plus 10% VAT and approximately 12% registration fee, pushing the on-road price above 1.85 billion VND. After January 1, 2026, the special consumption tax will drop to 70% of that for gasoline vehicles, equivalent to 350 million VND. This reduces the on-road price to around 1.66 billion VND, a savings of nearly 200 million VND.

Automakers Accelerate Efforts
Industry experts view the expanded incentives for all hybrid vehicles as a strategic move to encourage consumers to switch to fuel-efficient, low-emission vehicles. This expectation is evident in the market, with a rapid increase in hybrid vehicle interest in the latter half of 2025.

According to the Vietnam Automobile Manufacturers’ Association (VAMA), hybrid vehicle sales in the first nine months of 2025 reached 9,785 units, a 73.1% increase from the same period last year (5,652 units). This is the highest growth rate among internal combustion engine vehicle segments.

Capitalizing on this trend, numerous car brands have launched or announced plans to introduce hybrid models in recent months. Notable releases include the Suzuki Fronx, BYD Seal 5, Lynk & Co 08, Mercedes-Benz E-Class, Volkswagen Golf TSI, and upcoming models like the Hyundai Santa Fe Hybrid and Volvo XC90.

Beyond imports, some manufacturers are considering local assembly to secure supply and leverage domestic tax benefits. Toyota Vietnam recently announced a $360 million investment (approximately 9.47 trillion VND) to establish its first hybrid assembly line at the Phu Tho plant. Honda Vietnam has also confirmed it will begin assembling the CR-V e:HEV RS model starting in 2026.

Hybrids: A Practical Choice Before Electric Vehicles Go Mainstream

Experts consider hybrid vehicles an effective interim solution, given Vietnam’s limited charging infrastructure for electric vehicles. Hybrids offer significant fuel savings compared to gasoline vehicles without the dependency on charging stations like pure electric vehicles.

With current growth trends, industry insiders predict that by 2026, hybrids could account for 10-12% of total passenger car sales, triple the current rate. Japanese brands are expected to maintain their technological and product portfolio advantages, while Korean, Chinese, and European manufacturers are planning to introduce more affordable hybrid models.

TH (Tuoitrethudo)