You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 18, 2025

Vietnam’s Legal Framework on Electric Vehicles Offers New Opportunities for Investors

Subscribe to Updates

Vietnam’s electric vehicle (EV) industry is experiencing rapid growth, driven by a strong wave of new legislation, strategic plans, and government incentives. The government’s clear commitment to electrification is attracting foreign investment, supporting advanced production, and reducing reliance on internal combustion engine (ICE) imports. Recent national strategies, sector regulations, and technical standards demonstrate a rare level of regulatory momentum in Southeast Asia, positioning Vietnam as a competitive player in the global EV supply chain and an attractive market for foreign investors.

An overview of legal developments for the EV sector in Vietnam is presented below.

National Action Program for Green Transportation

A key driver of Vietnam’s EV growth has been the National Action Program for Green Transportation through 2050 stipulated in Decision No. 876/QD-TTg of the prime minister dated July 22, 2022. The National Action Program sets a detailed roadmap for the green energy transition in road transport.

For the period 2022–2030, the focus is on promoting the manufacturing, assembly, import, and conversion of road motor vehicles to electric power, expanding the use of 100% E5 gasoline for road vehicles, developing charging infrastructure to meet the needs of residents and businesses, and encouraging both new and existing bus stations and rest stops to meet green criteria.

For the period 2031–2050, the roadmap aims to gradually restrict and ultimately cease by 2040 the manufacturing, assembly, and import of fossil fuel-powered cars, motorcycles, and mopeds for domestic use. By 2050, the goal is for 100% of road motor vehicles and construction vehicles participating in traffic to use electricity or green energy, for all bus stations and rest stops to meet green criteria, and for all machinery and equipment for loading and unloading to transition from fossil fuels to electricity or green energy.

The program also calls for the completion of nationwide charging and green energy supply infrastructure to fully meet the needs of residents and businesses.

These measures provide regulatory certainty and a stable pathway for original equipment manufacturers (OEMs), suppliers, and charging-station operators to invest in nationwide electrification.

Policies to Support EV Adoption

Vietnam has also established a forward-looking policy framework to support the development, manufacturing, and commercialization of EVs. Official Letter No. 8685/VPCP-CN (2024) from the Government Office emphasizes the urgency of implementing policies to support EV adoption. These policies, expected to be issued in 2025, include:

  • Facilitating the replacement of fossil fuel vehicles.
  • Encouraging individuals and businesses to adopt EVs.
  • Issuing national technical regulations for EVs and their components.
  • Developing the EV manufacturing industry and supporting industries.
  • Expanding charging infrastructure.
  • Providing preferential electricity pricing for public charging stations.
  • Establishing national technical standards for charging and hydrogen stations.
  • Ensuring electricity supply for charging stations.
  • Promulgating tax and fee incentives.
  • Implementing policies for public procurement of EVs.
  • Offering direct and indirect financial support for users transitioning to EVs.
  • Attracting investment in EV manufacturing and supporting technologies.

More recently, on July 12, 2025, the prime minister issued Directive No. 20/CT-TTg on urgent and decisive tasks to prevent and address environmental pollution, which assigns specific responsibilities to key agencies, including the Ministry of Agriculture and Environment, Ministry of Public Security, and local governments, with clear deadlines and an emphasis on strict accountability, technological application, and public engagement to achieve sustainable development goals.

Specifically, in Hanoi, starting July 1, 2026, fossil fuel-powered motorcycles and mopeds will be banned from operating within the area of Ring Road 1; from January 1, 2028, this ban will extend to the area within Ring Roads 1 and 2 and include restrictions on private fossil fuel-powered cars; and from 2030 onward, the policy will be further expanded to Ring Road 3. Ring Road 1 is the innermost and most central of Hanoi’s ring roads, encircling the city’s historic urban core, while Ring Roads 2 and 3 extend outward to cover broader metropolitan and suburban areas.

Decision on Emission Standards Roadmap

Vietnam is actively promoting a shift from ICE vehicles to EVs as part of its broader green energy transition. One major legal development is a draft decision of the prime minister on the roadmap for implementing the national technical standards on emissions for automobiles in circulation in Vietnam, which sets out the roadmap below. (It is anticipated that carbon monoxide emission limits will be progressively reduced from Emission Level 1 to Emission Level 5; however, the specifications for each level are still being developed by the Ministry of Agriculture and Environment.)

For the effective date of the decision:

  • Automobiles manufactured before 1999 must comply with Emission Level 1.
  • Automobiles manufactured from 1999 onward must comply with Emission Level 2.

From January 1, 2026:

  • Automobiles with spark-ignition or compression-ignition engines manufactured from 2017 and registered in Hanoi and Ho Chi Minh City must comply with Emission Level 4.
  • Automobiles with spark-ignition or compression-ignition engines manufactured from 2017 and registered in other areas must comply with Emission Level 3.
  • Automobiles with spark-ignition or compression-ignition engines manufactured from 2022 must comply with Emission Level 4.

From January 1, 2027:

  • Automobiles with spark-ignition or compression-ignition engines manufactured from 2022 and registered in Hanoi and Ho Chi Minh City must comply with Emission Level 5

From January 1, 2028:

  • Automobiles with spark-ignition or compression-ignition engines manufactured from 2022 and registered in the remaining areas must comply with Emission Level 5

Opportunities for Foreign Investors in EV Manufacturing and Trading

Vietnam is actively opening its doors to foreign investment in the EV sector, offering a supportive legal framework and a range of investment incentives.

Investors in EV manufacturing in Vietnam may qualify for several incentives, including corporate income tax incentives such as lower tax rates, tax holidays, and tax reductions; import tax exemptions for goods imported to create fixed assets or for manufacturing; exemptions or reductions in land use fees, land rent, and land use tax; and accelerated depreciation to increase deductible expenses. The availability and extent of these incentives depend on factors such as project location, number of employees, and project scale.

Vietnamese law allows foreign investors to engage in import and distribution of EVs and related services, but the foreign investors are required to obtain necessary licenses, such as an import license, and comply with strict regulatory requirements. Common business structures include authorized distributors, exclusive dealerships, and domestic importers of completely built units. Additionally, the registration fee for EVs is exempt until the end of February 2027, and the special consumption tax for EVs is significantly lower than that for ICE cars. For EVs with up to 9 seats, this tax is 3% through February 28, 2027, increasing to 11% thereafter. ICE cars in the same category are subject to rates ranging from 35% to 150%, depending on engine size.

Outlook

Investors should monitor the changing legal landscape in Vietnam to ensure they are ready to enter the rapidly developing EV sector. With Vietnam’s ambitious roadmap to develop green transport infrastructure and phase out ICE vehicles, the market for EV manufacturing, trading, and relevant services presents attractive growth opportunities for foreign investors seeking to enter this emerging sector.

Related Professionals

Industries

Automotive

Energy

Practices

Corporate/M&A

Location

RELATED INSIGHTS​ 

May 13, 2026
Thailand has prescribed more stringent labeling specifications for traditional and electric vehicles (EVs), requiring manufacturers and importers for sale to display clear, accurate product information on vehicle labels. The requirements, which took effect on March 21, 2026, are set out in a notification issued under Thailand’s consumer protection framework. Background and Scope Under Thailand’s Consumer Protection Act (CPA), products manufactured for sale or imported into Thailand must generally comply with the CPA’s broad labeling requirements, unless the Label Committee prescribes more specific and stringent requirements for certain products. Accordingly, prior to the issuance of this notification, traditional autos and EVs were subject only to the general labeling requirements. Following the issuance of this Label Committee notification, traditional autos and EVs are now for the first time specifically subject to a dedicated regulatory framework for labeling. The requirements apply to private passenger vehicles and private trucks that have not yet been registered, including those powered by an internal combustion engine, electric power, or a combination of both. Label Requirements Labels must be displayed in Thai or with a Thai translation, and must be clearly visible and legible. Text must be proportional to the label area, with a minimum character height of 2 millimeters. All covered vehicles must display the following: Product name, trade name, or trademark Brand and model Manufacturer or importer information Size, weight, and load-bearing capacity Warranty conditions Drive system, usage instructions, and safety precautions Manufacturing date Price Additional Requirements for EVs EVs must also display the following: Type of electric vehicle (e.g., HEV, PHEV, BEV, or FCEV) Maximum electric motor power and rated continuous output power Battery type and capacity Battery warranty conditions or a clear statement that no warranty is provided Estimated driving range per full battery charge Electrical system safety standard Electricity consumption rate These
Read More
April 23, 2026
Thailand’s Board of Investment (BOI) has introduced a new investment promotion measure to encourage partnerships between Thai and foreign automotive parts manufacturers. The measure, published in the Government Gazette on March 31, 2026, under Notification of the Board of Investment No. 5/2569 Re: Investment Promotion Measures for Joint Ventures between Thai and Foreign Companies in the Auto Parts Manufacturing Industry, aims to enhance local industry participation and create new business opportunities for Thai operators. Corporate Income Tax Exemption Under this measure, the BOI grants an additional corporate income tax (CIT) exemption of three years to both new investment projects and existing operators under the BOI’s business category 3.4 (manufacture of engines, equipment, or parts) or category 3.5 (manufacture of vehicle parts). If the CIT exemption period is added to an existing one, the total exemption period will be capped at a maximum of eight years. To benefit from the exemption, certain conditions must be met, as described below. Conditions for New Investment Projects The joint venture company must be newly established after January 15, 2026. At least 20% of the registered capital must be held by a Thai juristic person throughout the CIT exemption period. The Thai juristic person must have been operating in the automotive or auto parts industry for at least three years prior to the application date and must be at least 60%-owned by Thai individuals. Conditions for Existing BOI-Promoted Projects The company must have been wholly foreign-owned at the time the promotion certificate was issued. The shareholding structure must be amended following the issuance of the notification to establish a joint venture between a foreign juristic person and a Thai juristic person that has been operating in the automotive or auto parts industry for at least three years prior to the application date. This Thai
Read More
April 21, 2026
Thailand’s Board of Investment (BOI) has introduced special investment promotion measures to accelerate the development of advanced automotive manufacturing technologies and the transitional electric vehicle ecosystem. Published in the Government Gazette on March 31, 2026, BOI Notification No. 4/2569 aims to stimulate the use of automation and robotic systems to improve production efficiency and increase the competitive capacity of Thailand’s automotive industry. Qualifying Project Categories All existing and new investment projects under the following promotional categories are eligible to apply for the new privileges: General automotive manufacturing (category 3.6) Manufacture of plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs) (category 3.8) Applications will be accepted until the end of 2027. Incentives and Benefits Eligible investment projects will receive exemption from import duties for machinery, and a 50% corporate income tax (CIT) exemption for three years on investment in automation and robotics systems, excluding land costs and working capital. If at least 30% of the total value of the modified or total machinery used is linked to or supports Thailand’s domestic automation machinery manufacturing industry, this CIT exemption will be increased to 100%. Eligible existing investment projects will be exempt from CIT on existing business income, with the exemption period counted from the date on which income is generated following receipt of the investment promotion certificate. Eligibility Conditions Projects must meet the following criteria to qualify for these privileges: The project must not currently benefit from CIT exemption. Those that have already received investment promotion may apply once their existing CIT exemption or reduction benefits have expired. The project must have an investment value of at least THB 1 million, excluding land cost and working capital but including expenditures for machinery, equipment, software, programs, information technology systems, and cloud or data center services, subject to conditions stipulated in
Read More
March 19, 2026
Thailand’s Electronic Transactions Development Agency (ETDA), which describes itself as a “co-creation regulator” working collaboratively with industry rather than imposing top-down rules, has unveiled its regulatory roadmap for digital platform businesses under the Royal Decree on Digital Platform Service Businesses B.E. 2565 (2022). The 2026 regulatory approach is guided by three core principles—“practicable, verifiable, shared responsibility”—aimed at elevating digital services to be safe, transparent, and fair. These principles inform ETDA’s 2026 priorities, which focus on three key dimensions: product and service standards on platforms, fair competition and fee transparency, and online fraud prevention. Product and Service Standards ETDA’s 2026 agenda addresses product and service standards across several platform categories: Online marketplace platforms. The Notification on Additional Measures for Online Marketplace Platforms under Section 18(2) came into force on December 31, 2025, designating 21 marketplace platforms that must verify products and merchants. Among other obligations, covered platforms must remove or suspend substandard products under the “notice and take down” principle. The ETDA has collaborated with the Food and Drug Administration and the Thai Industrial Standards Institute to develop inspection manuals and coordinate compliance procedures. Social commerce. The ETDA is preparing a new notification under Section 18(2) specifically targeting social commerce platforms with sales support functions, aiming to align regulation with evolving digital market conditions. Ride sharing. Since the postponement of the deadline to comply with the ETDA’s notification on ride-sharing platforms to March 31, 2026, the ETDA has supported drivers in registering with the Department of Land Transport through the Driver Verify registration system, which has already issued certifications to approximately 27,900 riders. The ETDA is also examining structural issues relating to appropriate insurance packages, motorcycle engine capacity expansion, and fair leasing fees and contract transfer costs in coordination with the Department of Land Transport, the Office of Insurance Commission,
Read More