The government of Laos has announced the suspension of imports of most fossil fuel-powered vehicles until the end of 2026 and imposed strict price controls on electric vehicles (EV) to ensure affordability.

Recently, the Office of the Prime Minister ordered the immediate implementation of the directive. Under the new policy, only passenger vehicles, project and production vehicles, and vehicles intended for specialised functions are exempt from the import ban.

Authorities have instructed the Ministry to develop a comprehensive pricing structure covering factory costs, transport, taxes, and profit ceilings for every class and brand of EV sold in Laos. Companies found to have exceeded these limits will face fines and additional penalties.

"If any company takes the opportunity to raise the price of electric vehicles unreasonably, there will be strict measures to impose fines and penalties," the notice stated.

Officials acknowledged that the policy shift could disrupt existing automobile importers and ordered a study to mitigate potential losses.

Previous policy measures

The 2026 directive follows several years of incremental policies aimed at promoting EV adoption in Laos.

Previous measures included tax incentives, reduced import fees, and fleet mandates for transport operators. Earlier in 2026, the government reduced EV registration and service fees while increasing levies on fossil fuel vehicles to encourage cleaner alternatives.

The government has also maintained a flexible monetary policy by adjusting interest rates and centralising state deposits to manage inflation and credit, ensuring that the transition to EVs does not create broader economic disruptions. By controlling EV prices and limiting fossil fuel vehicle imports, the government aims to accelerate the transition to sustainable transport, reduce reliance on imported fuels, and strengthen long-term energy security.