The government has issued a decree extending the exemption of registration fees for electric cars until February 28, 2027.

The decree, signed by Deputy Prime Minister Ho Duc Phoc, took effect on Saturday.

The registration fees for electric cars will be exempted for an additional two years after being applied in the past three years. 

Pursuant to the previous decree, electric vehicles running on batteries were entitled to registration fee incentives for five years, including a full exemption for the first three years and a 50-percent reduction for the next two years.

With the new decree, the government agreed to extend the full registration fee exemption for the next two years.

Earlier, electric vehicle maker VinFast proposed extending exemption or reduction of registration fees for electric cars from March 1, 2025 to February 28, 2028 to promote green transition, followed by a 50-percent reduction for an additional three years.

However, in mid-February, the Ministry of Finance suggested maintaining the registration fee exemption for electric vehicles until February 28, 2027. 

The ministry argued that the registration fee exemption for electric vehicles has significantly contributed to improving air quality and protecting the environment.

The policy has also helped develop the market, the electric vehicle industry, and supporting industries; create jobs; increase incomes for workers; and boost economic growth.

The policy is estimated to cost around VND4,800 billion (US$188 million) in state budget revenue per year in the next two years.

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