Honda Faces Market Shake-Up as Vietnam Accelerates Electric Motorbike Transition

Honda’s long-standing dominance in Vietnam’s motorbike market is facing growing pressure as the government pushes for a rapid shift toward electric vehicles (EVs), giving local manufacturer VinFast a major boost. Following Prime Minister Pham Minh Chinh’s July directive banning fossil-fuel motorbikes from central Hanoi within 12 months—and expanding the ban to more areas by 2028—Honda and other manufacturers voiced concerns, calling the timeline too aggressive.

Industry data shows Honda’s sales in Vietnam plunged 22% in August compared to July, marking a 13% year-on-year drop after the ban was announced. The move comes as part of the government’s efforts to tackle severe air pollution in Hanoi, which frequently ranks among the world’s most polluted cities.

According to a September survey by Asia Plus Inc., Vietnam’s consumers are increasingly shifting toward electric motorbikes. Among 200 respondents in Hanoi and Ho Chi Minh City, 54% said they plan to buy an electric bike next—rising to 60% in Hanoi—while only 24% still prefer gasoline models. The government’s pro-EV stance was cited as the key motivator behind the change.

Vietnam’s two-wheeler market, valued at $4.6 billion in 2025 and expected to reach $6 billion by 2030, remains largely dominated by petrol models. Honda, which sold 2.6 million motorbikes last year—over 80% of the total market—faces a fast-changing landscape as VinFast gains momentum. The local automaker delivered 71,000 electric motorbikes in the same period.

Although Honda has begun producing electric models, its market share in the EV segment remains unclear. The survey also found that while half of respondents would still consider Honda for their next purchase, 32% favored VinFast. As Asia Plus CEO Kengo Kurokawa noted, strong policy backing and public support are accelerating Vietnam’s transition to electric mobility faster than many expected.