Seize the opportunity to break through thanks to tax incentives

Tax incentives create a strong boost

Photo caption — Hyundai introduces the new Avante Hybrid model in Seoul, South Korea, on August 13, 2020. Photo: YONHAP/TTXVN

The Vietnamese automobile market is facing a major turning point when the Law on Special Consumption Tax (amended) was passed by the National Assembly on June 14, 2025, officially expanding tax incentives for self-charging hybrid vehicles (HEV) - a type of vehicle that uses a combination of both an internal combustion engine (gasoline) and an electric motor to operate.

Accordingly, from January 1, 2026, HEV vehicles will be subject to a special consumption tax rate of 70% compared to gasoline and diesel vehicles of the same capacity - a preferential rate previously reserved only for PHEVs (plug-in hybrids). The new policy is considered an important driving force to bring hybrid vehicles closer to the majority of consumers.

Calculations show the significant impact of tax incentives on car prices. Specifically, a car model with an import price of VND500 million is currently subject to a special consumption tax of 45% applicable to cars with a cylinder capacity of less than 2,000cc (equivalent to VND225 million), plus 10% VAT, bringing the car price up to VND796.5 million. When the new policy takes effect, the special consumption tax will be reduced to VND157.5 million; VAT will also be reduced, bringing the total car price down to VND723.25 million. Thus, the buyer saves VND73.25 million without affecting the manufacturer's profit margin.

For high-priced cars, the reduction is even stronger. For example, an imported car worth 1.5 billion VND is subject to a special consumption tax of 50% applied to cars with a cylinder capacity of 2,000-3,000cc, equivalent to 750 million VND. From 2026, this tax will be reduced to 515 million VND, helping customers save up to 225 million VND compared to gasoline cars of the same class. This difference is expected to significantly narrow the price barrier - a factor that makes consumers hesitant to approach hybrid technology.

Reducing prices not only encourages car purchases but also promotes the transition to green vehicles. Hybrid cars, with their advantages of fuel economy and reduced CO₂ emissions, are increasingly seen as a suitable solution in the context of Vietnam promoting sustainable development goals, reducing pollution and moving towards carbon neutrality. This is also the steadfast goal of major manufacturers such as Toyota or Honda, which are applying it as a stepping stone before switching from gasoline cars to fully electric cars.

Businesses accelerate investment - market booms

Along with policy incentives, auto companies are accelerating investment to anticipate the expected sharp increase in hybrid demand after 2026. Toyota and Honda, the two brands with the most extensive hybrid vehicle portfolios in the region, have both confirmed plans to boost domestic hybrid vehicle assembly.

Accordingly, Honda Vietnam Company officially announced the plan to assemble the advanced CR-V e:HEV (Hybrid vehicle) model at the factory in Phu Tho province, starting from the beginning of 2026 instead of importing from Thailand for distribution. Honda Vietnam said that Hybrid vehicles will be the main product in the transition period to electrification, contributing to the implementation of the carbon neutrality goal of the Vietnamese Government.

Since 2023, Honda Vietnam has continuously expanded its Hybrid product portfolio with the CR-V e:HEV RS, Civic e:HEV RS and HR-V e:HEV RS models, all of which apply advanced e:HEV technology including two electric motors combined with a gasoline engine, helping to save more than 30% fuel compared to traditional vehicles.

Meanwhile, Toyota Motor Vietnam also announced that it will invest more than 360 million USD (about 9,500 billion VND) to upgrade infrastructure and build a hybrid vehicle assembly line at the Phu Tho factory. Toyota Vietnam is distributing hybrid vehicles including Corolla Cross Hybrid, Innova Cross Hybrid, Altis Hybrid, Camry Hybrid and Yaris Cross Hybrid. The company said that the first domestically assembled hybrid vehicle is expected to be released in 2027. This is considered a strategic step to help Toyota expand production capacity, reduce dependence on imported supplies and increase competitiveness in the context of the hybrid market about to explode.

Not only traditional brands, new manufacturers are also quickly joining the race. At the end of October 2025, Omoda & Jaecoo Vietnam - a joint venture between Geleximco Group (Vietnam) and Chery Group (China) started construction of the first Chinese automobile factory in Vietnam, located in Hung Yen province. The factory has a total investment of VND 8,125 billion, a design capacity of 120,000 vehicles/year and is expected to be operational from 2026. This will be a facility that produces a variety of high-tech vehicles such as new energy vehicles, hybrid vehicles (PHEV - Super Hybrid) and pure electric vehicles (EV).

In parallel with the construction of the factory, Omoda & Jaecoo Vietnam also announced plans to launch 16 completely new SUV models, ranging from urban SUVs, sports SUVs to off-road lines in 2026. The appearance of a series of new products is expected to help the hybrid segment become more vibrant, creating strong competition in terms of price, technology and design in the coming years.

In addition to businesses investing in domestic production and assembly, the Vietnamese automobile market also has many other companies importing and distributing products such as Hyundai, Kia, Haval, BYD, Suzuki... showing confidence in the development prospects of the Vietnamese hybrid market. When the cost of ownership is significantly reduced thanks to tax incentives, combined with the advantage of fuel economy and increasingly perfect technology, hybrid cars become an attractive intermediate choice between traditional gasoline cars and pure electric cars.

Experts predict that the period 2026-2030 will be a boom period for hybrid cars in Vietnam. This is not only a positive signal for the auto industry, but also an important contribution to the goal of reducing greenhouse gas emissions, sustainable development and promoting the "green car" trend that Vietnam is pursuing.

Source: https://baotintuc.vn/kinh-te/don-co-hoi-but-pha-nho-uu-dai-thue-20251204075632889.htm