10 Transformative Policies Shaping Vietnam’s Automotive Industry by 2025

For the first time, the automotive policy framework has shifted from a neutral stance to one with clear priorities: promoting green transportation, gradually phasing out high-emission vehicles, and restructuring the entire industry value chain.

When examining the policies introduced and implemented in 2025, a consistent narrative emerges: the rules of the game have changed, and businesses that fail to adapt risk being left behind.

Registration Fee Exemption for Electric Vehicles: The Biggest Lever of 2025

The most direct and impactful measure is the government’s extension of the 100% registration fee exemption for electric vehicles until February 2027. With typical registration fees ranging from 10% to 12%, this policy reduces the price of electric vehicles by tens to over a hundred million dong compared to their gasoline counterparts. More importantly, this long-term incentive provides stable pricing advantages, setting it apart from short-term promotional campaigns and bolstering consumer confidence.

Special Consumption Tax: A Purposeful Distinction

In parallel, the special consumption tax continues to serve as a deliberate regulatory tool. Electric vehicles are taxed at significantly lower rates than gasoline vehicles, while hybrids also enjoy relative benefits. This policy not only influences consumer behavior but also compels automakers to recalibrate their product strategies and seriously consider electrification roadmaps to maintain long-term competitiveness.

Tightening Emission Standards: A Persistent Underlying Pressure

Another enduring pressure comes from stricter emission standards. According to the environmental authority’s roadmap, Euro 5 and eventually Euro 6 standards are being rigorously enforced for new vehicles. While not an immediate shock, this policy significantly increases technology and production costs for gasoline vehicles, making older, low-cost models increasingly unsustainable. Meanwhile, electric and hybrid vehicles indirectly benefit from their emission advantages.

Net Zero 2050 Commitment: The Foundation for All Policies

All these policies are underpinned by Vietnam’s commitment to achieve net-zero emissions by 2050. This pledge is no longer just a statement but a cornerstone of policy planning, with transportation and the automotive sector as key pillars. As this goal becomes more concrete, electrification shifts from an experimental choice to a long-term survival imperative for businesses.

Charging Infrastructure: Unlocking Market Confidence

A major hurdle for electric vehicles—charging infrastructure—has seen significant breakthroughs in 2025. Permitting and encouraging the installation of charging stations in apartment complexes, parking lots, and shopping centers not only addresses technical challenges but also eliminates consumer psychological barriers. As charging becomes more convenient and commonplace, electric vehicles are increasingly viewed as everyday transportation rather than experimental options.

No Extension of Incentives for Assembled Gasoline Vehicles: A Strategic Brake

Conversely, the decision not to extend registration fee incentives for domestically assembled gasoline vehicles serves as a strategic brake. Amid rising production costs, CKD (Completely Knocked Down) vehicles must compete directly with imports and electric vehicles without policy advantages. This sends a clear signal that the government will not indefinitely protect internal combustion engine technology.

Policies for Commercial Transport: EVs Take the Lead

Policies for commercial transport also accelerate the shift. Many localities prioritize electric taxis and gradually restrict new gasoline vehicles in urban transport. While not an outright ban, this direction is strong enough to push transport companies toward electric vehicles—which offer lower operating costs and faster ROI—creating a ripple effect in the consumer market.

Promoting Localization and Supporting Industries

Policy focus is shifting toward localizing electronic components, batteries, and electric motors. If effectively implemented, this will position Vietnam’s automotive industry as a deeper participant in the global production network.

Green Credit: Selective Capital Flows

Financially, green credit has become an indirect but effective regulatory tool. Electric vehicle projects, battery production, and charging infrastructure receive preferential access to capital, while high-emission projects face increasingly stringent credit conditions. Capital flows are thus guided in alignment with policy objectives.

Urban Emission Management: Soft Advantages for EVs

Urban emission management strategies provide soft advantages for electric vehicles, from access to restricted spaces to favorable traffic planning. Though not codified in rigid regulations, these factors solidify the long-term position of electric vehicles.

TH (Tuoitrethudo)