The Coordinating Minister for Economic Affairs recently announced that electric vehicle incentives will not be extended to 2026, and the related budget will be redirected to the national car program to revitalize the domestic automotive industry and attract automaker investment. The incentive allowed imports of completely built-up (CBU) units to enjoy zero import duty (previously 50%). Since its launch in February 2024, six companies have participated.
These six companies include BYD, VinFast, Geely, XPeng, National Assemblers (including Aion, Citroën, Maxus, Volkswagen), and Inchape Indomobil Energi Baru (Great Wall ORA). The condition for obtaining the incentive is that companies must produce an equivalent number of electric vehicles domestically in accordance with the local content (TKDN) requirements, with a production obligation period from January 1, 2026, to December 31, 2027. If the target is not met, the government can claim compensation through bank guarantees.
He pointed out that the incentive will expire on December 31, 2025 and will not be renewed, as the government is now focusing on developing national cars, with the budget allocated to that program, and drawing lessons from VinFast's experience. He also emphasized that automakers who have already enjoyed EV incentives should fulfill their factory construction commitments. Existing companies and VinFast have begun investing in factory construction, while other companies that have not set up factories need to follow VinFast's lead in simultaneously advancing investment and production plans.
The Coordinating Minister for Economic Affairs recently announced that electric vehicle incentives will not be extended to 2026, and the related budget will be redirected to the national car program to revitalize the domestic automotive industry and attract automaker investment. The incentive allowed imports of completely built-up (CBU) units to enjoy zero import duty (previously 50%). Since its launch in February 2024, six companies have participated.
These six companies include BYD, VinFast, Geely, XPeng, National Assemblers (including Aion, Citroën, Maxus, Volkswagen), and Inchape Indomobil Energi Baru (Great Wall ORA). The condition for obtaining the incentive is that companies must produce an equivalent number of electric vehicles domestically in accordance with the local content (TKDN) requirements, with a production obligation period from January 1, 2026, to December 31, 2027. If the target is not met, the government can claim compensation through bank guarantees.
He pointed out that the incentive will expire on December 31, 2025 and will not be renewed, as the government is now focusing on developing national cars, with the budget allocated to that program, and drawing lessons from VinFast's experience. He also emphasized that automakers who have already enjoyed EV incentives should fulfill their factory construction commitments. Existing companies and VinFast have begun investing in factory construction, while other companies that have not set up factories need to follow VinFast's lead in simultaneously advancing investment and production plans.