According to Electrek, Laos has done something that no other country in the world has ever tried.There will be an outright ban on the import of new petrol and diesel passenger cars from June 1, and almost all new cars allowed to be imported must be electric. This is the most aggressive electric vehicle mandate in the world currently.
According to reports, the Lao government announced a suspension of the import of fuel vehicles. The ban will last until the end of 2026 and will be implemented by the Ministry of Industry and Trade.After the import of fuel vehicles was frozen, 100% of the vehicles imported into Laos in June were electric vehicles.
However, the ban does not cover all areas. Special vehicles such as public transportation vehicles, construction machinery, and project-related trucks are not subject to restrictions. Diesel vehicles will continue to be used in areas where electrification is currently impossible. This is a policy for passenger cars, clearly targeting market segments where affordable electric alternatives already exist.
Laos' move is not to gain climate news attention. The logic behind it revolves around economics. This landlocked country with a population of 7 million relies almost entirely on hydropower, and its export strategy also revolves around selling electricity to neighboring countries.
But every drop of fuel consumed by cars relies on imports and needs to be paid for with Laos’ chronic shortage of foreign currency.Every time an electric vehicle replaces a fuel vehicle, it means replacing imported diesel with domestic hydropower.
In order to promote consumers to switch to electric vehicles, Laos has adopted both soft and hard policies: pure electric vehicles priced below US$50,000 enjoy full consumption tax exemptions; the government has reduced registration fees for electric vehicles; and requires transportation companies to have at least 10% of their fleets as electric vehicles by the end of 2026.
In terms of infrastructure construction,In April this year, Laos signed an agreement with 27 public-private partners to jointly build charging stations, battery swapping stations, central digital platforms and financial products. The national goal is to achieve 30% of vehicles as electric vehicles by 2030.
The market gap left by Laos's fuel vehicles has been almost completely filled by China. In June, China's electric vehicle exports to ASEAN reached US$1.2 billion in a single month, with exports to Laos and Cambodia both hitting record highs.
Chinese brands, as well as Vietnam's VinFast, already have a strong foothold in these markets through its Xanh SM taxi platform. Banning the sale of fuel vehicles is actually subsidizing companies that sell cheap electric vehicles, and these companies are currently Chinese automakers.
