According to a proposal from the Ministry of Transport , consumers who purchase electric vehicles will receive a subsidy of approximately $1,000 per vehicle.
The Ministry of Transport has just submitted proposals to the Government to support the transition to electric vehicles, with three main policy groups: support for car buyers, incentives for manufacturers, and development of infrastructure for electric vehicles. These are also policies that many countries have adopted during the phase of encouraging the transition from gasoline to electric vehicles.
Accordingly, for users, the Ministry of Transport proposes exemption or reduction of registration fees and license plate fees for electric vehicles. Buyers will have access to credit and subsidies. Transport businesses switching to electric vehicles will receive preferential loan terms, and electric buses will receive higher subsidies than regular buses.
The ministry also recommended increasing priority for electric vehicles in urban areas, such as prioritizing parking spaces and establishing zero-emission zones in urban cores where only zero-emission vehicles are allowed to operate.
Another solution proposed by the regulatory body to support consumers is to provide them with a subsidy of approximately $1,000 per vehicle when purchasing an electric car. This is considered a subsidy to encourage them to shift their consumption behavior.
A customer in Hanoi using an electric car, April 2023. Photo: Giang Huy
The regulatory agency also proposed adding the manufacturing and assembly of electric vehicles and electric vehicle batteries as a priority investment sector. Businesses involved in manufacturing, assembly, and maintenance would receive preferential treatment regarding import taxes on electric vehicles; access to finance and credit; and priority access to and transfer of manufacturing and assembly technology. Imported components, equipment, and production lines would be exempt from or subject to reduced taxes.
Charging station infrastructure is considered a crucial component for the development of electric vehicles. Therefore, the Ministry of Transport recommends that management agencies promptly regulate the system of electric charging stations within urban and residential technical infrastructure and allow the construction of public charging stations in existing buildings without requiring a change in land use purpose.
Currently, the special consumption tax on domestically produced and assembled electric vehicles with fewer than 9 seats is 3%, valid until February 28, 2027. The Ministry of Transport stated that manufacturers of these vehicles wish to extend the tax reduction period and request a 5-year VAT exemption, followed by a 50% reduction for the next 5 years.
According to data from the Ministry of Transport, the number of newly manufactured, assembled, and imported electric vehicles has increased 75-fold in the past two years, from 167 vehicles in 2021 to 12,585 vehicles as of mid-July 2023. However, electric vehicles in Vietnam are currently mainly passenger cars and city buses.
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