This article provides general information only and is not legal advice for any specific case. Regulations may change – please consult a professional before acting.
To accelerate the shift to green transport, the Vietnamese Government has rolled out a series of electric vehicle (EV) policies – tax and fee incentives, public-procurement preferences and consumer support – that both track global technology trends and give concrete effect to Vietnam’s emission-reduction commitments.
1. Tax Incentives for EVs
Law No. 03/2022/QH15 (effective 1 March 2022) sharply reduced the special consumption tax (SCT) on battery electric cars, creating a decisive competitive edge. The SCT roadmap starts low and steps up after the initial incentive window:
- Cars up to 9 seats: 3% (1 Mar 2022 – 28 Feb 2027) → 11% (from 1 Mar 2027);
- 10–16 seats: 2% → 7%;
- 16–24 seats: 1% → 4%;
- Passenger-cum-cargo vehicles: 2% → 7%.
In addition, Decree No. 51/2025/ND-CP (amending Decree 10/2022) extends the 100% exemption from first-time registration fees for electric cars until 28 February 2027 – replacing the original plan to cut the exemption to 50% from March 2025. The extension signals a stronger, more flexible commitment to the EV market.
These measures align with the green energy transition roadmap under Decision No. 876/QD-TTg and Vietnam’s COP26/COP28 climate commitments.
2. Market Potential and the Investment Case
The policy push is delivering results. Vietnam’s auto market rebounded to roughly 340,000–390,000 new vehicles in 2024, with battery-electric vehicles posting triple-digit growth – helped by tax incentives and affordable model launches. Market reports project EV-sector growth above 20% per year through 2025–2030, opening opportunities across the supply chain: batteries, components and final assembly.
For international investors, the current framework offers three structural advantages:
- Stability and transparency: the incentive roadmap is legislated through 2027, making cash-flow and payback modelling straightforward;
- Multi-layer incentives: beyond SCT and registration-fee relief, EV manufacturing projects can access corporate income tax incentives, FTA tariff reductions on components and industrial-zone land incentives;
- Alignment with national strategy: EV projects contribute directly to the Net Zero 2050 target, easing access to green finance and international support programmes.
3. What Investors Should Prepare For
Executing an EV manufacturing project in Vietnam demands more than capital and technology: it requires command of investment, environmental, tax, customs and IP regulations, plus cross-border transaction rules. From choosing the investment form (100% FDI, joint venture or OEM cooperation) and obtaining the Investment Registration Certificate, to negotiating partner contracts and meeting technical standards – each step benefits from experienced local counsel.
Planning an EV or green manufacturing project in Vietnam?
Our Projects & Infrastructure and Tax teams structure incentives, licensing and supply-chain contracts end to end. Contact us for a free consultation.
