Jakarta, INTI - The Vietnamese government plans to extend the tax cut for electric vehicles (EV) until 2030. This tax incentive extension is expected to boost EV sales while reducing emissions. According to Reuters, the government will submit a draft proposal to extend this incentive to parliament for approval.
The Vietnamese government has been providing special tax cuts for electric vehicles since March 2022. These tax cuts range from 1 to 3 percent. Previously, Vietnam even provided tax cuts of up to 4 to 11 percent.
This incentive policy for electric vehicles was originally scheduled to expire in February 2027. However, the Vietnamese government now wants to extend it, especially with the potential for increasing EV sales.
EV Sales Contribute to Vietnam’s Net Zero Targets
Electric vehicle sales in the country have surged dramatically from 7,000 units per year in 2022 to around 175,000 units in 2025. This sales surge is said to be driven by the tax cut incentive policy. The increase in EV sales also contributes to Vietnam's 2025 net-zero target. The Vietnamese government stated that each EV can reduce carbon emissions by 0.85 metric tons per year.
"Continuing to apply tax incentives for electric vehicles could generate a range of positive impacts, helping accelerate the shift toward cleaner-energy transport, reduce emissions, and improve air quality, particularly in major cities,” the Vietnamese government wrote in its draft proposal to extend the tax incentives.
In addition to tax incentives, the Vietnamese government is also offering another incentive in the form of a two-year exemption from the initial vehicle registration fee for EVs until February 2027.
Conclusion
Vietnam plans to extend its electric vehicle tax incentive until 2030 to boost EV sales and reduce emissions. This policy, which has been in effect since 2022, has been shown to increase sales from around 7,000 units to 175,000 units by 2025. It also supports the country’s net-zero target. Vietnam also plans to add another policy of waiving initial vehicle registration fees.
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