Vietnam plans to extend tax incentives for EVs until 2030

The government will submit the proposal to extend the tax cut to parliament ⁠for approval, the office said in a statement, citing a report from the finance ministry.

Vietnam cut the special consumption tax on EVs in March 2022 to a range of 1%-3%, from the previous level of 4%-11%. The cut is set to end in February 2027.

Annual EV sales in Vietnam skyrocketed from nearly 7,000 in 2022 to nearly 175,000 last ‌year ⁠following the tax cut, it said.

This has contributed to Vietnam's 2050 net zero target, it said, noting that each EV helps reduce carbon dioxide emissions by 0.85 metric tons a year compared ⁠to vehicles using internal combustion engines.

"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 report said.

Last ⁠month, the government also decided to extend an exemption for first-time registration fees for EVs by two years to February 2027.