Vietnam auto association worries 96% of gasoline cars could be removed from market by 2030

The Vietnam Automobile Manufacturers Association (VAMA) has raised concerns that up to 96% of their gasoline-powered cars could be taken out of the market by 2030 due to a proposed national fuel consumption standard.

The draft regulation, prepared by the Ministry of Construction, proposes a Corporate Average Fuel Consumption (CAFC) target of 4.83 liters per 100 km for all passenger vehicles by 2030. The ministry is currently seeking public feedback.

Under the draft plan, the 4.83L/100km benchmark is calculated as an average across all models sold by a manufacturer. This means automakers can balance more fuel-efficient models with those consuming more, as long as the fleet average meets the target. In an ideal scenario, all models would consume at or below the threshold.

To offset excess consumption, manufacturers could purchase credits from others that exceed the target - similar to global carbon credit systems. Automakers failing to meet the requirement would be required to submit a roadmap for improvement, which could include phasing out fuel-intensive models or adopting new technologies. After three years of non-compliance, companies may be forced to halt production, imports, or sales until compliance is restored.

VAMA criticized the proposed target as “too strict,” warning of widespread disruption to the auto industry. It estimates that 96% of current gasoline-powered models and 14% of hybrids would fail to meet the standard.

For example, Toyota’s most fuel-efficient internal combustion engine (ICE) model, the Wigo, consumes between 4.5-5.5L/100km. The best-performing variant of the popular Toyota Vios sedan still consumes 5.08-7.62L/100km - both exceed the proposed CAFC.

On the other hand, many of Toyota’s hybrid models meet the target. The Yaris Cross HEV averages 3.5-3.8L/100km, and the Camry HEV ranges between 4.11-4.4L/100km.

To meet the 2030 goal and maintain sales, VAMA estimated that the industry would need to increase the share of electrified vehicles, including hybrids, plug-in hybrids, and battery electrics, by 868% in just five years. It said this is unrealistic given the current limitations in charging infrastructure and low consumer adoption of EVs.

As a more achievable alternative, the association proposed a phased approach, targeting 6.7L/100km by 2027, gradually tightening to 6.0L/100km by 2030. Even under this plan, automakers would need to cut gasoline vehicle output by 34% and boost electrified vehicle sales by at least 366%.

Fuel consumption limits are seen as a critical step in reducing carbon emissions - a move already adopted in many countries. However, experts said a balanced and practical roadmap is key.

According to one Vietnamese auto policy expert, only manufacturers focusing on hybrids and EVs will be able to comply easily. Brands that rely solely on internal combustion engine (ICE) models, particularly luxury vehicles with large engines, face steep challenges, he told local media.

Vietnam’s passenger vehicle market currently includes a mix of ICE, hybrid, and fully electric vehicles. Some automakers, such as Toyota, Honda, Hyundai, and Ford, offer a combination of all three, while others like Mitsubishi and Volkswagen still rely solely on ICE models. A few brands, including VinFast and Wuling, sell only EVs.

Under the Prime Minister's Directive No. 20/CT-TTg issued on July 12, Hanoi will become the first Vietnamese city to ban fossil fuel-powered motorcycles and mopeds from the city's inner Ring Road 1, starting July 1, 2026. This move initiates the country’s gradual transition towards green transportation.

From January 1, 2028, the ban extends to gasoline-fuelled motorbikes and restriction targets private fossil-fuel cars within both Ring Roads 1 and 2.