also set to end by February 2027. In comparison, special consumption tax applied to tradition ICE vehicles can go up to rates of 15-50 per cent. This policy greatly encourages buyers of new passenger vehicles to opt for EVs over petrolpowered cars.
Vietnam’ s new transport policy does not only apply to passenger vehicles, but to the country’ s buses and roads as well. The government required all city buses to be green by 2025. By 2030, at least 50 per cent of Vietnam’ s urban buses must be electric.
In Hanoi, petrol-powered motorcycles and mopeds will face gradually increasing bans from 2026 until 2028. Starting 1 July 2026, these vehicles will be banned from the city’ s innermost road, Ring Road 1 and then Ring Road 2 starting 1 January 2028. The ban in 2028 will also extend to private cars. By 2030, the ban will also include Ring Road 3, which connects the city centre to broader Hanoi.
In addition to passenger and public transport vehicles, EV battery manufacturers may also take advantage of several financial incentives set by the government. EV battery manufacturers can enjoy reduced or exempted corporate income tax.
For companies in high tech or industrial zones, they may be exempted from income tax for the first 4 years“ from when taxable income arises.” The succeeding 9 years allows investors to make use a 50 per cent reduction on corporate income tax. There will also be an applied preferential tax rate of 10 per cent for the next 15 years, in lieu of Vietnam’ s standard 20 per cent rate.
For EV battery manufacturers or investors to avail of these incentives, they must ensure that 1) their sector is listed under the incentivised industries regardless of if their location is considered a“ high tech” or industrial zone and 2) commitments
12 ISSUE 57 FEBRUARY 2026 / WWW. AFMA. ORG. AU