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​ 

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
March 9, 2026
Over the past several years, numerous automobile manufacturers have brought electric vehicles (EVs) to the market and received positive feedback from consumers in Thailand and around the world. EVs have gained popularity due to their lower maintenance costs, reduced energy expenses, and environmental benefits. However, reports have emerged of EVs causing problems such as battery fires, autopilot malfunctions leading to accidents, and safety systems such as brakes engaging automatically under inappropriate conditions. Even when these situations do not cause injury to drivers or passengers, they raise significant concerns for EV manufacturers, importers, and sellers operating in Thailand. These problems may seriously impact businesses if the products are identified as unsafe under Thailand’s Product Liability Act (PLA), officially known as the Liability for Damages Arising from Unsafe Products Act. Under this law, authorities or courts can order business operators to recall products from the market or prohibit their export, import, or sale. To manage and mitigate the risk of being found liable for damages due to an unsafe product under the PLA, EV business operators should be aware of the scope of the law. Potentially Liable Parties The PLA identifies several types of entrepreneurs and business operators—both individuals and entities—as “potentially liable parties” (PLPs) who may be held liable under the law. In the EV context, this could include vehicle manufacturers, battery suppliers, software developers whose systems are integrated into the vehicle, and local importers or distributors. Specifically, the PLA covers: Manufacturers or hirers Importers Sellers of goods for which the manufacturer, hirer, or importer cannot be identified Any other party who uses the name, trade name, trademark, or statements associated with the alleged unsafe products, or acts in a manner that causes them to be perceived as a manufacturer, hirer, or importer Definition of “Product” and “Unsafe Product” The
Read More
February 20, 2026
On February 2, 2026, Myanmar’s Ministry of Finance and Revenue issued Notification No. 19/2026, reducing the customs duty rate to 0% for certain battery‑electric vehicles, machinery, and related spare parts, applicable from February 2, 2026, through March 31, 2026. Under the notification, imports of battery‑electric special‑purpose vehicles, battery‑electric industrial machinery, and associated spare parts listed in the notification’s annex are eligible for a zero‑percent customs duty rate. These items must be supported by technical recommendations from the Ministry of Electric Power and a recommendation from the Ministry of Industry. The notification applies to a broad range of battery electric equipment, including the following categories: Special purpose vehicles, such as crane trucks, mobile drilling trucks, concrete mixers, mobile clinics, broadcast vans, and street‑cleaning vehicles. Heavy machinery, including excavators, bulldozers, loaders, cranes, rollers, forklifts, and port handling equipment. Spare parts, covering 16 specified categories, including key components such as chargers, inverters, and controllers. Importers and businesses using electric‑powered industrial equipment should review the scope of the eligible items and confirm whether their planned imports fall within the lists covered by the notification.
Read More
February 10, 2026
Data center and cloud investments are forming a major focus of private-sector investment in Thailand, with tech giants like Amazon, Google, Microsoft, and TikTok, as well as numerous telecom and data center companies, committing significant outlays to data center and cloud development. The country’s Board of Investment (BOI) approved projects worth THB 1.87 trillion in 2025, and THB 746 billion of this was from planned data center investments—by far the largest amount from any single industry. Thailand’s swift rise as a regional data center hub is fueled by surging demand for cloud, AI, and digital services, as well as large-scale investments from global tech firms. The country’s strategic location, competitive power costs, robust fiber infrastructure, expanding IT talent, and supportive government policies—including BOI incentives and streamlined approvals—have made it an attractive destination for scalable and sustainable digital infrastructure investments. The BOI’s proactive approach in updating promoted categories and providing both tax and non-tax incentives further ensures Thailand’s continued growth in this sector. 2025 BOI Changes for Data Centers In the middle of 2025, the BOI responded to the remarkable trend by updating investment‑promotion categories across various sectors (e.g., machinery and electrical equipment, public utilities, digital and innovative industries) to accommodate growing investment in data‑center projects. Before the change, which was detailed in a notification that has applied to investment promotion applications submitted from July 1, 2025, onward, data‑center projects under BOI promotion were granted a single A1 incentive (an eight‑year corporate income‑tax exemption) and subject to one uniform set of conditions. The July 2025 notification restructured promotion for data centers into two categories based on power‑usage efficiency: high‑efficiency data centers and other data centers. Under these rules, qualified high‑efficiency data centers are eligible for an eight‑year corporate income tax (CIT) exemption, while for other data centers this exemption is
Read More