Starting July 1, 2024, Hanoi will usher in a significant shift in urban mobility by banning all gasoline-powered two-wheel vehicles within the confines of Ring Road 1, effectively covering much of the city’s downtown. This move is not a standalone initiative; the ban is set to expand to Ring Road 2 in 2028, targeting fossil fuel-powered personal cars alongside motorcycles. By 2030, the restrictions will reach the outermost Ring Road 3, marking a decisive step towards cleaner urban transport.
Meanwhile, Ho Chi Minh City (HCMC) is pondering similar measures, contemplating designated zones that favor green vehicles while restricting access to gasoline and diesel motorcycles, particularly in the bustling downtown and environmentally sensitive regions like Can Gio and the Con Dao Special Zone. With the stakes this high, one could speculate that the electric scooter has officially become the new “it” vehicle in Vietnam.
These impending restrictions promise to reshape the landscape of Vietnam’s motorcycle market. As the country’s largest urban centers, Hanoi and HCMC are at the forefront of motorcycle consumption, standing as hubs of economic activity. Electric bikes made their debut in the early 2000s, catering primarily to students who can ride them without a license, thus developing an early market for electric vehicle (EV) adoption.
Historically, these e-bikes were largely imports from China, providing an affordable alternative in a competitive market. Until recently, Detech was the lone domestic manufacturer based in Hung Yen. However, after 2010, the industry witnessed a surge of local brands, with Dibao emerging in 2011, Pega in 2012, DK Bike in 2014, and Anbico in 2015. Enter VinFast in 2018, the ambitious brand backed by Vingroup, along with Selex Motors and Dat Bike, which also launched in the following year.
The Chinese brand Yadea, now the dominant electric two-wheeler manufacturer globally, set up two large factories in Bac Giang in 2019 with plans to produce up to two million vehicles annually. Following suit, Tailg, another Chinese heavyweight, planted roots in Hung Yen in 2024, with a yearly production capacity of 350,000 vehicles. Traditional gasoline motorbike makers see the winds of change, with Yamaha unveiling its first electric motorcycle, the Neo’s, in 2022, while Honda — holding over 80% of the market share — debuted its electric models in 2024, the ICON e: and the premium CUV e:.
Despite the flurry of activity in the electric segment, Suzuki, SYM, and Piaggio, who remain members of the Vietnam Association of Motorcycle Manufacturers (VAMM), have yet to release fully electric options. VinFast, uniquely positioned as a transparent player, revealed sales of nearly 71,000 units in the last year, representing a modest 3% of the gasoline motorcycle market, which totaled 2.65 million units. However, the lack of official statistics on annual electric motorcycle sales poses a challenge for comprehensive market analysis.
Policy Shifts and Industry Reactions
Industry experts believe that Hanoi’s gradual ban on gasoline-powered motorcycles — and HCMC’s possible follow-up — will dramatically transform Vietnam’s motorcycle landscape. The two-wheel vehicle continues to be the primary mode of transport due to its affordability, flexibility, and infrastructure support. According to the International Council on Clean Transportation (ICCT), two-wheelers fulfill 72.6% of transport needs in Hanoi and 82% in HCMC.
For Honda, which sells nearly 2.15 million units annually, Hanoi represents a critical market, contributing around 8-9% of its total sales. The company’s spokesperson acknowledged the profound implications of these policy changes, emphasizing both logistical and financial challenges in transitioning to eco-friendly vehicles in such dense urban settings. “Replacing a significant number of internal combustion vehicles swiftly could impose substantial pressures,” they noted, highlighting insufficient charging infrastructure and fire safety concerns.
While Honda advocates for a delay to allow more time for technical standards and infrastructure development, the responses from other manufacturers remain unclear. A spokesperson from Suzuki Vietnam confirmed that VAMM members would convene to devise strategies for a potential transition to green vehicles. Currently, there are no government incentives for purchasing electric motorcycles unlike electric cars, which enjoy waivers on registration fees until February 2027. Hanoi is looking at supporting the replacement of approximately 450,000 gasoline motorcycles, potentially covering most costs for new electric options, alongside the establishment of charging zones for electric and clean-energy vehicles.
Leading the charge on infrastructure investment, VinFast is paving the way with extensive charging facilities across the country, while most other EV brands predominantly rely on home charging. Exceptionally, Dat Bike has made investments in charging stations, although currently focused in HCMC, further underlining the emerging dynamics of Vietnam’s electric vehicle ecosystem.
Questions & Answers
What are the main areas impacted by Hanoi’s electric vehicle ban?
The ban initially affects areas within Ring Road 1, which encompasses most of downtown Hanoi, with plans to extend to Ring Road 2 in 2028 and to Ring Road 3 by 2030.
How will traditional motorcycle manufacturers adapt to the upcoming policy changes?
Manufacturers like Honda and Yamaha are exploring strategies to transition towards electric vehicles, but face challenges related to infrastructure and the rapid pace of required changes.
What incentives are currently available for purchasing electric motorcycles in Vietnam?
As of now, there are no government incentives for electric motorcycles, unlike electric cars, which benefit from waived registration fees until February 2027.
