Toyota has urged Vietnam to allow hybrid vehicles in future Low Emission Zones (LEZs) in Ho Chi Minh City, citing their potential to reduce fuel consumption and CO2 emissions. The proposal was made by Toyota Vietnam general director Hirata Osamu at a meeting between Vietnamese Prime Minister Le Minh Hung and representatives of Japanese businesses operating in Vietnam.
Hirata said self-charging hybrids could significantly reduce fuel consumption and CO2 emissions without requiring charging infrastructure or substantially changing motorists’ driving habits. He also noted that these vehicles could continue operating during natural disasters or power supply disruptions, which is an advantage given Vietnam’s conditions.
Proposed LEZs in Ho Chi Minh City
The city plans to designate several central areas with poor air quality, heavy traffic, and high population density as LEZs from mid-2027, where gasoline- and diesel-powered vehicles will face restrictions. Hirata proposed that self-charging HEVs be recognized as vehicles prioritized for circulation alongside Battery Electric Vehicles (BEVs).
Toyota also called for low-emission-zone policies in major cities to be introduced through a practical, phased roadmap, giving residents and businesses time to prepare and adapt. They proposed that the environmental performance of different vehicle technologies be assessed over their entire life cycles, from energy production to vehicle operation.
This assessment would provide a more full understanding of the emissions levels of various vehicle technologies, enabling the government to make informed decisions about which vehicles to prioritize in LEZs. By considering the entire life cycle of vehicles, the government can encourage the development of low-emission vehicles that not only reduce emissions during operation but also have a lower environmental impact during production and disposal.
Special Consumption Tax
Regarding special consumption tax, Hirata proposed that Vietnam gradually shift from calculating the tax based on engine displacement to a system based on CO2 emissions. He said such a system would more accurately reflect the emissions levels of different vehicle technologies and encourage the development of low-emission vehicles, including electric vehicle models.
Hirata noted that Toyota had invested in Vietnam for more than 30 years and remained committed to long-term investment in the market. The company has decided to invest $360 million in Vietnam to expand its production capacity and prepare for mass production of self-charging hybrid vehicles and other electric vehicle models.
The investment in Vietnam is a significant indication of Toyota’s commitment to the market and its confidence in the country’s potential for growth. By expanding its production capacity, Toyota aims to increase its market share in Vietnam and contribute to the development of the country’s automotive industry.
Government Response
Prime Minister Hung asked ministries, agencies, and local authorities to urgently review the progress of handling recommendations from Japanese businesses and resolve issues within their jurisdiction in a timely manner. He said agencies responsible for particular issues must proactively address them on schedule, while existing regulations should be accompanied by clear guidance for businesses to follow.
The prime minister also requested that the results of handling the recommendations be compiled and made public on the Government Portal and relevant government websites to ensure transparency and clarity. Regarding the proposal on special consumption tax for self-charging hybrid vehicles, the prime minister asked the Ministry of Finance to study the Japanese businesses’ proposal and report to the government in October.
Toyota and other Japanese businesses continue to invest in Vietnam.
The country’s automotive industry is likely to see significant developments in the coming years. With the proposed LEZs and potential changes to special consumption tax, Vietnam may become a more attractive market for low-emission vehicles, including self-charging hybrids.
Toyota’s investment in Vietnam is a significant indication of the company’s commitment to the market, and its proposal for LEZs and special consumption tax may have a lasting impact on the country’s automotive industry. As the government considers these proposals, it will be important to balance the needs of businesses and residents with the goal of reducing emissions and improving air quality.
Toyota Vietnam general director Hirata Osamu’s proposal was specific.
The proposal is part of a broader effort by Japanese businesses to contribute to Vietnam’s economic development and environmental sustainability. Other Japanese businesses at the meeting also raised issues related to transport, education, energy, taxation, science and technology, and retail, demonstrating the diverse range of interests and investments that Japanese companies have in Vietnam.