TLDRs;
- Vietnam will ban fossil-fuel motorbikes in Hanoi within a year and nationwide by 2028.
- Honda’s Vietnam sales fell 22% month-on-month after the ban announcement.
- VinFast is rapidly gaining traction with affordable electric motorbike models.
- Vietnam’s clean energy push could reshape Southeast Asia’s two-wheeler industry.
Honda’s decades-long dominance in Vietnam’s motorbike market is under serious threat as the government accelerates efforts to transition toward electric mobility.
A sweeping new directive, issued by Prime Minister Pham Minh Chinh in July, outlines plans to ban fossil-fuel-powered motorbikes from central Hanoi within the next 12 months, with a nationwide phaseout scheduled by 2028.
The move is part of Vietnam’s broader strategy to combat severe air pollution in its urban centers, a problem that has worsened due to the heavy reliance on motorbikes as the country’s primary mode of transportation. With over 50 million registered motorbikes, the shift toward cleaner alternatives marks one of Southeast Asia’s most ambitious green transport initiatives to date.
Honda’s Sales Decline Amid Transition
For Honda , which commands more than 80% of Vietnam’s motorbike market, the shift represents both a challenge and a wake-up call.
The Japanese automaker sold roughly 2.6 million motorbikes in Vietnam last year, underscoring its unrivaled dominance. However, data from August shows a sharp 22% month-on-month decline in sales, alongside a 13% year-on-year drop following the government’s announcement.
The decline signals growing uncertainty among Vietnamese consumers, many of whom are reconsidering their next motorbike purchase in anticipation of the fossil fuel ban. Analysts say the transition could reshape the competitive landscape, creating opportunities for domestic electric vehicle makers to gain ground.
“Honda has built its empire in Vietnam on affordability, reliability, and brand trust,” said a transportation industry researcher based in Ho Chi Minh City. “But the government’s EV policy is changing the rules of the game — and local manufacturers like VinFast are moving fast to capitalize.”
VinFast Rides the Electric Wave
Local electric vehicle manufacturer VinFast, a subsidiary of conglomerate Vingroup, has rapidly positioned itself as Honda’s most formidable challenger. The company delivered 71,000 electric motorbikes last year, capturing a small but fast-growing slice of the market.
A September survey by Asia Plus Inc. revealed that 54% of respondents in Vietnam’s two largest cities plan to choose an electric motorbike for their next purchase, citing government incentives and environmental concerns as key motivators. Interestingly, while 50% said they would still consider Honda, 32% favored VinFast, signaling a growing openness to local EV brands.
VinFast’s aggressive pricing, government backing, and expanding charging network are driving adoption at a pace unseen just two years ago. The company has also been promoting flexible financing and battery subscription models to attract younger riders and commuters, a demographic crucial to Vietnam’s motorbike economy.
Clean Energy Policy Redefines Competition
Vietnam’s fossil fuel ban aligns with the country’s Net Zero 2050 commitments and reflects a wider shift in Asia’s green transportation agenda. Major cities like Bangkok and Jakarta are pursuing similar EV strategies, but Hanoi’s rapid implementation timeline is drawing particular attention from global manufacturers.
For Honda, adaptation will be essential. The company has already announced plans to expand its electric product lineup and localize EV production in Southeast Asia, but analysts warn that the speed of Vietnam’s policy rollout could outpace Honda’s transition timeline.
