Short Report on Electric Vehicles and Hybrid Vehicles in Vietnam

Vietnam is widely recognized as a motorcycle society. Now, as it becomes more affluent and approaches a full-scale transition to automobiles, it appears the shift will be toward electric vehicles first. Riding the wave of growing public concern over urban air pollution, the government is actively promoting EV conversion policies. Participation from overseas manufacturers is also increasing, accelerating the spread of electric vehicles and hybrid vehicles.

Rapid EV Adoption

The EV market size is estimated at approximately 3 billion USD in 2025, growing at an average annual rate of 18% and projected to reach 7 billion USD by 203015 . Sales volume increased roughly 20-fold over the two-year period from 2022 to 2024. During the same period, hybrid vehicles also increased more than threefold. Consumer interest in environmentally friendly vehicles is rapidly rising16 . However, Vietnam’s automobile sales in 2023 saw a significant decline compared to 2022. The main factors were the expiration of a temporary 50% reduction in registration tax for domestically assembled vehicles, which had boosted sales in 2022, and the loss of this short-term demand stimulus effect. Simultaneously, against a backdrop of slowing economic growth and weakening exports, consumers became more cautious about purchasing high-value durable goods. Additionally, high interest rates and tightened credit conditions reduced the appeal of auto loans.