KATHMANDU : Laos has become the first country to effectively allow only electric passenger cars to be imported after suspending imports of new petrol and diesel-powered passenger vehicles.
The ban came into effect on June 1, 2026, and will remain in place until the end of the year. The policy is being implemented by the country’s Ministry of Industry and Commerce.
The restriction applies only to passenger vehicles. Public transport, construction equipment, project-related trucks and other specialized vehicles are exempt, allowing diesel-powered commercial vehicles to continue entering the country.
Unlike many countries, Laos introduced the policy primarily to reduce fuel imports rather than to meet climate goals. The country generates most of its electricity from hydropower but imports all of the fuel used by conventional vehicles.
Replacing petrol and diesel cars with EVs is expected to reduce foreign currency spending on fuel imports while increasing the use of domestically generated electricity.
To accelerate EV adoption, the government has introduced several incentives. Fully electric vehicles priced below US$50,000 are exempt from excise tax, while EV registration fees have also been reduced.
Transport companies have also been directed to ensure that at least 10 percent of their fleets are electric by the end of 2026.
Laos is simultaneously expanding its EV infrastructure. In April, the government signed agreements with 27 public and private partners to develop charging stations, battery-swapping facilities, a national digital platform and EV financing services.
The country aims to have 30 percent of all vehicles running on electricity by 2030.
The policy is also expected to benefit Chinese EV manufacturers, which already have a strong presence in Laos. Chinese brands, along with Vietnam’s VinFast through its Xanh SM electric taxi service, are rapidly expanding in the market.
The move comes as EV adoption continues to accelerate globally. Global electric vehicle sales reached 2 million units in June.
