Vietnam emerged as Southeast Asia's largest electric-car market in 2025, with electric vehicles accounting for nearly 40% of new-car sales as adoption more than doubled, putting the country among the world's leading markets for electric mobility, according to the International Energy Agency (IEA).

The rapid adoption put Vietnam ahead of Thailand and Indonesia and above the global average of about 25%, highlighting the speed at which electric vehicles (EVs) have gained ground in a market that was close to zero in 2020.

In its Global EV Outlook 2026, the IEA said electric-car sales in Southeast Asia more than doubled in 2025 to over 500,000 vehicles, with EVs accounting for nearly one in five new cars sold.

Vietnam, Indonesia and Thailand led regional growth, supported by policy incentives, expanding domestic production and imports, particularly from China, the IEA said. In Vietnam, electric-car sales more than doubled in 2025, lifting the EV share of new-car sales to around 40%, above levels recorded in most European countries, the report said.

The transformation has been particularly striking given the market's starting point. Electric cars had only a marginal presence in Vietnam in 2020 before sales began accelerating rapidly.

Thailand was the region's second-largest electric-car market in 2025, with sales rising 70% to about 140,000 vehicles, accounting for nearly one-quarter of new-car sales.

Globally, electric-car sales exceeded 20 million in 2025, up 20% from the previous year, with EVs accounting for 25% of all new-car sales, or one in every four vehicles sold.

China remained the world's largest EV market, with more than 13 million electric cars sold and an EV sales share of nearly 55%. Europe recorded 4.2 million EV sales, representing 28% of new-car sales, while the United States remained at around 10%.

The IEA said growth in Southeast Asia was supported by a combination of government incentives, growing local production and imports.

Vietnam has supported EV purchases through exemptions from registration fees for battery-electric vehicles since 2022, while VinFast's expansion of affordable models has helped broaden the market, the IEA said. It aimed to sell 300,000 electric cars this year.

The IEA expects the trend to continue, projecting that Vietnam could reach an electric-car sales share of more than 80% by 2035, the highest among Southeast Asian countries.

A market research company said Vietnam's electric-car market is gaining momentum as rising fuel costs and growing environmental awareness, together with government incentives, encourage consumers to consider switching to EVs.

Domestic industry data showed that nearly 29% of newly registered vehicles in the first half of this year were new-energy vehicles, including battery-electric and hybrid models.

The Vietnam Automobile Manufacturers' Association (VAMA) projected that the number of electric cars on Vietnam's roads would reach around 1 million by 2028 and 3.5 million by 2040.

Charging infrastructure getting ready

The rapid shift towards electric mobility is prompting the development of charging infrastructure needed to support the growing number of EVs on the road.

VinFast currently has the largest charging network in Vietnam through V-Green, with more than 150,000 charging ports nationwide, and plans to focus on larger charging hubs to support long-distance travel while expanding battery-swapping infrastructure for electric motorbikes. VinFast has also worked with Petrolimex and PVOIL to install EV charging facilities at petrol stations.

PV Power, a unit of PetroVietnam, has also moved into the sector, signing a cooperation agreement with South Korea's EN Technologies Inc. to study and develop EV charging systems in Vietnam.

The Government also aims to make charging infrastructure a key part of its broader green-transport strategy.

Under the programme to shift the transport sector towards green energy, with the long-term goal of achieving net-zero greenhouse gas emissions by 2050, Vietnam calls for the promotion of EV production, assembly and imports, as well as the development of charging infrastructure.

The Government has also instructed ministries to review regulations on the installation of charging stations at petrol stations and develop standards for charging facilities in apartment buildings, commercial centres and roadside rest areas.