Vietnam to Introduce Strictest Fuel Consumption Regulations! 96% of Fuel Vehicles Face Elimination, Hybrid Cars Also Not Spared

The Ministry of Construction of Vietnam (Bộ Xây dựng) is drafting a new "Draft National Technical Standards" and is seeking opinions from the public and relevant parties. The most notable content includes:By 2030, the average fuel consumption (CAFC) of all passenger vehicles in Vietnam must be reduced to 4.83 liters per 100 kilometers.If officially implemented, this goal will have a huge impact on the entire automotive industry.

According to the proposal, when calculating the Corporate Average Fuel Consumption (CAFC), an overall average approach will be adopted. This means that as long as the average fuel consumption of all models sold by all automakers in Vietnam reaches 4.83 liters/100 kilometers, it is considered compliant. This implies that some automakers' models may be below or equal to this value, while others may exceed it, but as long as the industry-wide average meets the requirement, it is acceptable. The ideal situation, of course, is for all automakers' products to meet or exceed this target.

For enterprises that exceed fuel consumption standards, the plan also proposes a "carbon trading" mechanism similar to the global practice: allowing enterprises with excessive fuel consumption to purchase "fuel consumption credit points" from those with fuel consumption below the standard for offsetting. Additionally, enterprises must develop CAFC adjustment plans for the subsequent years, aiming to achieve targets through measures such as technological upgrades, phasing out high fuel consumption models, and increasing the proportion of energy-saving models.

If a car company is unable to meet the stipulated fuel consumption standards within three years, the relevant authorities will force it to cease production, assembly, or importation until it presents a compliance plan.

However, this goal has sparked strong opposition from the Vietnam Automobile Manufacturers Association (VAMA - Hiệp hội các nhà sản xuất ôtô Việt Nam). The association believes thatThe CAFC target of 4.83 liters/100 kilometers by 2030 is "too stringent."It will have a huge impact on the entire automotive industry. According to VAMA's estimates, currently on the market96% of traditional gasoline vehicles and 14% of hybrid vehicles do not meet this fuel consumption standard.。

For example, in the case of Toyota, the lowest fuel consumption model among its currently available traditional fuel vehicles is the Wigo, with a fuel consumption of 4.5 to 5.5 liters per 100 kilometers depending on different road conditions (currently only the G version is still available). Meanwhile, the best-selling sedan for Toyota in Vietnam and the entire market, the Vios, has a lowest fuel consumption version, the 1.5E MT, with a fuel consumption of 5.08 to 7.62 liters per 100 kilometers, which is significantly higher than the standard of 4.83 liters.

The Yaris Cross HEV model is driving in Gia Lai.

In contrast, several of Toyota's hybrid models are expected to meet the new standards. For example, the Yaris Cross Hybrid (HEV) has a fuel consumption of only 3.56 to 3.8 liters per 100 kilometers, and the Camry Hybrid (Camry HEV) has a fuel consumption of 4.11 to 4.4 liters.

A representative from VAMA pointed out that in order to achieve the industry's 2030 CAFC targets and maintain sales volumes, automakers must increase the proportion of electrified vehicles (including hybrid vehicles, plug-in hybrid vehicles, and pure electric vehicles) by approximately 868% over the next five years, which is nearly ten times the current level. However, given the underdeveloped charging infrastructure, limitations of the power grid, and limited consumer acceptance of electric vehicles, such a commercial adjustment is almost unfeasible.

VAMA therefore suggests adopting a more moderate transition plan by setting gradually decreasing fuel consumption targets year by year.In 2027, it will be 6.7 liters per 100 kilometers; in 2028, 6.5 liters; in 2029, 6.3 liters; and by 2030, it will decrease to 6.0 liters.According to this path, automakers only need to reduce fuel vehicle sales by about 34% and increase electrified models by at least 366%, which is more realistic and feasible than directly achieving the target of 4.83 liters.

Controlling automobile fuel consumption is an important means of reducing carbon emissions, and many countries and regions have already implemented similar policies. However, the key is to establish a scientifically reasonable and gradual implementation path.

A Vietnamese automotive policy expert stated that for the new fuel consumption standards in 2030, automakers that only sell hybrid or pure electric vehicles will find it relatively easy to meet the requirements, while brands that only sell traditional fuel vehicles or large-displacement luxury cars will face great challenges.

Currently, the passenger car market in Vietnam offers a wide variety of models, ranging from traditional internal combustion engine vehicles (ICE), hybrid electric vehicles (HEV) to pure electric vehicles (EV). Different automakers have distinct business strategies. Mainstream brands such as Toyota, Honda, Subaru, Ford, Kia, Hyundai, Mercedes, and BMW mostly sell fuel vehicles, hybrids, and electric vehicles simultaneously; brands like Mitsubishi, Isuzu, Jeep, and Volkswagen mainly sell traditional fuel vehicles; while brands like VinFast and Wuling focus exclusively on the pure electric vehicle market.