Electric vehicles and hybrids accounted for nearly 40% of Vietnam's passenger car market in the first half of 2026, reflecting a continued shift towards electrified vehicles.

Clear signs of a market shift

Data from the Vietnam Automobile Manufacturers' Association (VAMA), VinFast and Hyundai Thanh Cong showed that Vietnam's vehicle market grew by 29% year-on-year during the first six months of 2026. Sales of electrified vehicles increased by 72.5% compared with the same period in 2025. The figures include battery electric vehicles sold by VinFast, along with combined hybrid sales reported by VAMA members. The data does not include electric or hybrid vehicles from Chinese brands.

By comparison, sales of petrol and diesel vehicles rose by 11.44% year-on-year. The difference in growth rates has altered the market mix. In the first half of 2025, internal combustion engine vehicles accounted for 71.16% of total sales. That share fell to 61.44% during the same period this year, with nearly 10 percentage points shifting to electrified vehicles, increasing their market share to 38.56%.

An independent economist said that the nearly 10-percentage-point increase in the market share of electrified vehicles, alongside the decline in internal combustion engine models, indicates that Vietnam's automotive market has entered a medium- to long-term transition.

"As electric vehicles and hybrids achieve greater scale, their growth will gradually stabilise, but the consumer shift towards greener vehicles is irreversible," he said.

Multiple factors driving growth

Industry experts said that the growth of electrified vehicles has been driven by a combination of broader model availability, government support and sales incentives from manufacturers. Consumers now have access to a wider range of affordable electrified models across mainstream segments. The introduction of competitively priced models has expanded the availability of electric vehicles to a broader customer base.

A market researcher said that government incentives and transport policies aimed at reducing emissions are expected to have an impact on vehicle purchasing decisions over the next three to five years.

Hybrid vehicles have also benefited from a 30% reduction in special consumption tax for eligible self-charging hybrid models, alongside promotional campaigns from Toyota, Honda, Hyundai and Kia, including subsidised financing, registration fee support and direct discounts.

According to Dr Nguyen Thiet Lap of the Faculty of Automotive Engineering at the University of Transport and Communications, hybrid vehicles attract buyers because of their fuel efficiency and driving performance, while electric vehicles are associated with advanced technology and lower operating costs.

However, he noted that the pace of EV adoption will continue to depend heavily on the expansion of charging infrastructure and improvements in aftersales services. As charging networks expand and customer support develops, EV sales are expected to increase further.

Beyond government policies and new product launches, manufacturers' business strategies have also contributed to demand. At the beginning of 2026, VinFast launched its "Fierce Spirit for a Green Future" campaign, offering incentives including zero-down-payment financing, price reductions, free charging, battery replacement support and an extension of free charging benefits until 2029.

Traditional carmakers are adapting

Industry experts said that the shift in market share reflects changing consumer preferences as well as the need for established manufacturers to reassess their product strategies.

Dao Cong Quyet, Head of VAMA's Communications Subcommittee, said that buyers are no longer focused solely on powertrains, but are placing greater importance on technology, the ownership experience and environmental considerations. He added that the combination of technology, pricing and environmental awareness is influencing purchasing decisions.

For traditional manufacturers, Quyet said that hybrid vehicles represent a practical strategy in the current market. VAMA members are developing hybrid roadmaps because the technology builds on their existing expertise while allowing them to retain customers without immediately facing the challenges associated with charging infrastructure.

Dr Nguyen Thiet Lap also noted that Vietnamese consumers continue to base their purchasing decisions on a wide range of factors, including household income, transport infrastructure, ownership costs and maintenance expenses.

As a vehicle remains a major financial investment for most families, any model seeking to maintain its market position must meet multiple requirements, including practicality, operating costs, servicing accessibility, styling and pricing.