Implementation of Policies and Measures to Promote the Use of Electric Vehicles and Renewable Energy.

PREAMBLE

The Government of the Lao PDR has introduced policies and measures to encourage the adoption of electric vehicles (EVs) and renewable energy. These include a temporary suspension of fuel-powered vehicle imports until the end of 2026, alongside initiatives to promote EV usage and strict enforcement of vehicle transaction settlements through the banking system. These actions are designed to reduce the outflow of foreign currency and advance the transition toward clean energy.

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KEY PROVISIONS

1. Measures on Import Control and Vehicle Pricing by the Ministry of Industry and Commerce in collaboration with relevant sectors.

1. Suspension of Fuel-Powered Vehicle Imports

The importation of all fuel-powered vehicles will be suspended until 31 December 2026.

Exceptions: Passenger transport vehicles; trucks and machinery vehicles serving projects and production; and specialized vehicles.

2. EV Price Control Measures:

A detailed EV pricing structure shall be established, covering ex-factory price, transportation costs, customs duties-taxes, and profit ceilings, to prevent price gouging. Any company found to unreasonably increases EV prices will be subjected to strict fines and penalties.

c) Abolishment of Import Rights Fees for certain EV types:

• 100% EVs priced below USD 50,000: The collection of import rights fees is abolished with immediate effect.
• 100% EVs priced at USD 50,000 and above, and Alternative Energy Vehicles: Import rights fees will be re-evaluated to align with anti-extravagance policies.

d) Infrastructure Development and EV Charging Stations:

The Ministry of Industry and Commerce shall coordinate with central and local authorities to accommodate the growing demand for electric vehicles. Measures shall include promotion investment in charging stations; facilitating land allocation for charging station installations; and determining appropriate electricity tariffs for operators.

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2. Strict Measures on Finance and Vehicle Registration by the Ministry of Public Works and Transport in coordination with the Ministry of Industry and Commerce

To enhance transparency in vehicle transactions, the Government shall implement the following measures:

• Implement a mechanism requiring all vehicle purchases and sales to be conducted exclusively through the banking system.
• Regulate vehicle registration by strictly requiring proof of bank transfer.
• Strengthen transparency in the importation and distribution of vehicles.
• Enforce strict disciplinary penalties against state officials who violate vehicle registration regulations.

Effective Date: The Ministry of Public Works and Transport shall issue supporting legal legislation, with official enforcement commencing on June 1, 2026.

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3. Tax and Customs Policies by the Ministry of Finance, in coordination with the Ministry of Industry and Commerce and relevant sectors

The following actions shall be undertaken:

• Research and develop tax and customs policies for alternative energy vehicles.
• Encourage the business sector to transition toward clean energy vehicles.
• Support the national policy objective of reducing foreign currency outflow.

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CONCLUSION

Notification No. 602/PMO marks a significant step by the Government of the Lao PDR in accelerating the transition to electric vehicles (EVs). It strengthens control over fuel-powered vehicle imports, enhances transparency in vehicle transactions, and advances infrastructure development to support EV adoption.

These measures are designed to reduce foreign currency outflow, lessen dependence on imported fuel, promote clean energy, and lay the foundation for a modern, efficient, and sustainable transportation system in the Lao PDR. Through coordinated implementation across relevant ministries and sectors, the policy is expected to contribute to long-term economic resilience, energy security, and environmentally sustainable development.

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ABOUT ILAW LAOS

ILAW LAOS will continue to closely monitor legal and regulatory developments in the Lao PDR and provide professional updates to support informed decision-making and compliance for businesses and investors.

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