Govt pushes for shift to electric vehicles

The government is urging people to switch to electric vehicles to cut fuel imports and ease the impact of rising energy prices triggered by the war in the Middle East.
Prime Ministerial Order No. 40/PM, dated March 13, 2026, sets out stronger measures to address fuel price pressures and promote the use of electric transport nationwide.
The order directs the Ministry of Finance to review and adjust excise tax rates to encourage the shift away from fuel-powered vehicles.
Taxes on such vehicles will be raised across all categories, making them more costly and less attractive compared to electric options. This marks a clear policy move to reduce reliance on fossil fuels over time.
Currently, under the 2019 Excise Tax Law, the excise tax on fossil fuel-powered vehicles ranges from 25 percent to 90 percent, while clean energy vehicles such as electric cars are taxed at only 3 percent.
At the same time, the ministry will work with the relevant sectors to simplify the import process for electric vehicles and cut unnecessary costs. The move is aimed at removing the barriers that have slowed electric vehicle adoption in Laos, where high prices and limited supply have made them less accessible.
The policy follows on from the Ordinary Government Meeting for January-February 2026, which called for the wider use of clean energy in transport.
Government agencies are instructed to begin switching official vehicles from fuel to electric or other alternative energy sources. New purchases of fuel-powered vehicles will be restricted, helping to reduce long-term fuel spending and set an example to the public.
The order also targets inefficiencies in the transport sector. Authorities will end lump-sum tax collection and other practices that do not comply with the law. Clear and standard rules on customs duties and fees relating to domestic and international freight will be formulated and applied nationwide.
These changes aim to prevent duplicate taxation, remove unauthorised checkpoints, and reduce extra costs for transport operators. This is expected to improve the flow of goods and lower business expenses.
In addition, sector agencies are tasked with assessing how global energy instability affects economic growth and national stability. Their findings will support efforts to keep the National Socio-Economic Development Plan on track.
The government says the current energy crisis is an incentive to strengthen self-reliance and build a more resilient economy, while bolstering cooperation with regional and international partners.

By Times Reporters
(Latest Update March 19, 2026 )