Laos Bans Imported Gasoline Cars Starting June 2024, Shifts Fully to EVs

Starting June 1, 2024, Laos has suspended the import of new gasoline- and diesel-powered passenger vehicles, a ban that will remain in effect until the end of 2026 and will be enforced by the country’s Ministry of Industry and Commerce. During this period, virtually all newly imported vehicles permitted into the country must be fully electric. The policy primarily targets passenger cars and does not apply to specialized vehicles such as public transport buses, construction machinery, or project-related trucks. Additionally, diesel vehicles may continue to be used in regions where electrification is not yet feasible. With a population of approximately 7 million, Laos relies heavily on hydropower for its electricity supply and has long exported surplus power to neighboring countries. Since all fuel must be imported—consuming valuable foreign exchange—the government aims to alleviate pressure on its foreign reserves by promoting electric vehicles (EVs) powered by domestically generated hydropower instead of imported fossil fuels. To accelerate EV adoption, Laos has exempted fully electric vehicles priced under $50,000 from all consumption taxes and reduced their registration fees. Furthermore, transportation companies are required to ensure that at least 10% of their fleets consist of electric vehicles by the end of 2026. On the infrastructure front, in April 2024, Laos signed agreements with 27 public and private partners to jointly develop charging stations, battery-swap stations, a central digital platform, and associated financial products, with the goal of having 30% of all vehicles nationwide be electric by 2030. Data shows that all new vehicles imported into Laos in June 2024 were electric, the majority of which came from China. That same month, China’s EV exports to ASEAN reached $1.2 billion, with shipments to both Laos and Cambodia hitting record highs. Currently, Chinese brands, along with Vietnam’s VinFast through the Xanh SM taxi platform, dominate the local EV market.