Hanoi, Dec. 14 -- Vietnam's auto industry is on the brink of a major transformation as excise tax reductions set to take effect in 2026 are expected to significantly cut the cost of hybrid vehicles, driving new investment and propelling rapid market expansion.

Tax incentives set the stage for market acceleration

The sector is approaching a pivotal moment following the National Assembly's June 14 approval of amendments to the Law on Excise Tax, extending preferential rates to self-charging hybrid electric vehicles (HEVs).

Under the revised framework, effective January 1, 2026, HEVs will benefit from a tax rate equal to 70% of that applied to petrol or diesel vehicles of comparable engine size, a concession previously limited to plug-in ...