Vietnam on the Road to the Electrification of Two-Wheelers

Vietnam has set ambitious targets to reduce greenhouse gas (GHG) emissions and tackle air pollution, backed by international and national commitments. In particular, the transport sector is a major contributor to Vietnam’s GHG emissions and air quality problems, accounting for 18% of the country’s total GHG emissions. Recognizing the urgency, the Ministry of Transport is tasked with developing comprehensive programs to promote and advocate environmentally sustainable transport modes, including electric vehicles.

Two-wheelers are the dominant mode of transport in Vietnam, accounting for 93.3% of all motor vehicles. The ownership rate in 2018 was 615 vehicles per 1,000 inhabitants, while the car ownership rate was 38 vehicles per 1,000 inhabitants.

The situation in Vietnam today

There are two types of standards for two-wheelers: technical regulations and technical standards. Technical regulations are developed and promulgated by the Ministry of Transport (MOT) and compliance is mandatory to ensure quality, safety and environmental protection. Compliance with technical regulations is mandatory for new vehicles. By contrast, compliance with technical standards is voluntary. All or parts of a specific standard become mandatory only when it is referenced in legal documents or technical regulations. Non-compliant two-wheelers may face market replacement.

Technical regulations

Two technical regulations apply exclusively to electric two-wheelers and define the technical requirements and safety controls applicable to the electric motor and the quality of the electric motor and traction batteries.

Technical standards

Technical standards for electric two-wheelers have covered many aspects, from standards for chain requirements and test methods for motorcycles to standards for measuring motorcycle exhaust emissions during inspection, maintenance, safety requirements for lithium-ion battery systems, lithium-ion cell testing and safety, vehicle safety specifications, vehicle operational safety, electrical safety, vehicle performance and power consumption.

Two-wheelers on the streets of Vietnam. Unsplash (2017)

Emission standards

To certify a two-wheeler, manufacturers must pass three tests:

• Type I: verifies the average emissions of selective pollutants in an urban environment according to predetermined test cycles.
• Type II: carbon monoxide emissions
• Evaporative emissions test.

The following table gives examples of two different emission standards for two-wheelers and the requirements for each.

Click to expand Emission standards for two-wheelers. PEM Motion (2024).

Electric two-wheelers taxes and charges

Five types of taxes and fees apply to the ownership and use of two-wheeled vehicles: registration tax, value-added tax (VAT), excise duty (ISC), registration fee (payable once when the vehicle is purchased) and compulsory third-party insurance (payable once a year). These taxes and fees also apply to conventional two-wheelers, and Vietnam has no incentive policy to encourage people to buy and use electric two-wheelers.

The taxes and duties described in the following table apply only to domestically manufactured and assembled vehicles. The number of two-wheeled vehicles imported into Vietnam is relatively small, and most imported vehicles are mainly used for leisure purposes rather than daily travel.

Click to expand. Taxes and fees. PEM Motion (2024).

Conclusion

Gaps in policies, regulations and standards have been identified that are hindering the progress of two-wheeler electrification. Two-wheelers are one of the largest sources of greenhouse gas emissions and air and noise pollution in the country. Promoting electric two-wheelers could reduce greenhouse gas emissions from transport and improve air and noise quality in Vietnam. However, technical regulations and standards for electric two-wheelers and specific policies to promote the development of electric two-wheelers, which could influence the progress of electrification in the country, are not yet available.

As Vietnam continues to develop its transportation policies, there is a need to consider implementing incentive schemes to promote the use of electric two-wheelers and align taxation policies to support sustainable mobility solutions.