October 31, 2025Oct 31 Photo courtesy of Vietnam News Hybrid vehicles are becoming a focal point in Việt Nam's automotive industry, boosted by impending tax incentives set to boost adoption and local production. According to the Việt Nam Automobile Manufacturers’ Association (VAMA), over 9,700 hybrid cars were sold in the first nine months of 2025, marking a 73% increase compared to the previous year. The growth reflects a shift toward eco-friendly transportation, with around 20 hybrid models now available across various market segments. The popularity of hybrids priced between VNĐ600 million and VNĐ900 million has surged, driven by affordability and reduced operating costs. Manufacturers are bolstering this trend by offering extended battery warranties and decreasing replacement costs. Starting January 1, 2026, the revised Law on Special Consumption Tax will tax all hybrid vehicles at 70% of the rate applied to conventional petrol cars, reducing costs significantly for consumers. Currently, only plug-in hybrids benefit from this tax rate, but the change will encompass all hybrid types. VAMA suggests the tax reform will lead to savings of VNĐ26 trillion in fuel costs and VNĐ28 trillion in oil imports. Despite the rising demand, all hybrids sold in Việt Nam are currently imported. However, the incentives could encourage local manufacturing, creating jobs and enhancing the supply chain. Toyota Việt Nam plans to locally assemble hybrids, with a US$360 million investment to modernize its facilities for production. Other manufacturers are similarly expected to increase local involvement. Presently, hybrids only account for 2.5% of total vehicle sales nationally, presenting substantial growth opportunities. Increasing hybrid adoption may reduce CO₂ emissions by over 2.6 million tonnes, according to VAMA, while saving VNĐ333 billion in carbon credits. The new tax law aligns with Việt Nam’s green growth strategy and aims to bolster energy-efficient, low-emission vehicles. Deputy Minister Cao Anh Tuấn affirmed that the tax reform will support eco-friendly vehicle production, expediting the transition towards net-zero by 2050. Key Takeaways Hybrid car sales in Việt Nam increased by 73% in 2025. New tax incentives effective from 2026 to reduce hybrid vehicle costs. Local production could strengthen the supply chain and create jobs. Click here for more Vietnam stories Adapted by ASEAN Now from Vietnam News 2025-10-31
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