Vietnam had 140 hybrid, plug-in hybrid, and pure electric vehicles in 2019, 900 in 2020, and 600 in the first quarter of 2021, most of which were hybrids. At the 2021 Los Angeles Auto Show, VinFast, a division of VinGroup, the biggest local EV manufacturer in Vietnam, launched the VF e35 and VF e36 electric cars. VinBus runs e-buses in Hanoi, Ho Chi Minh City, Haiphong, Da Nang, and Can Tho. VinFast plans to create 20,000 electric cars and 1,500 buses by 2023. This shows a significant growth of electric vehicles in Vietnam.
KIA, Mercedes-Benz, Toyota, Daimler, Tesla, Proterra, Nissan, BYD, Honda, Hyundai, VDL, ABB, and Volvo are key EV players in Vietnam. Most enterprises aim to launch new products in Vietnam in 2024. KIA launched the EV6 in Vietnam in mid-2021 and is selling it in 2023.
Infrastructure for charging electric vehicles in Vietnam
The lack of EV charging facilities in Vietnam is a major obstacle in this area. The first rapid EV charging infrastructure debuted in Da Nang in December 2017. Central Power Corporation and Mitsubishi support this prototype project. VinFast installed 500 EV charging stations by July 2021 and expects to have 2,000 worldwide with over 40,000 charging ports by 2023. VinBus contracted with Star Charge to supply smart charging stations in November 2020. Vinfast developed a $174 million VinES Battery Manufacturing Factory in Ha Tinh, Vietnam, in December 2021 to generate 1 million battery packs per year.
Vietnam has a strong capacity to meet electric car manufacturing needs
Porsche has fast charging stations in Hanoi and Ho Chi Minh City for its Taycan cars, while Mitsubishi and Audi are also installing them for EV distribution. The 500kV power infrastructure provides power to Vietnam from north to south, stretching over 1500 kilometers. The main electricity is 220V. Vietnam may suffer power shortages in 2024 due to its 12% annual electricity consumption growth. Vietnam’s transmission lines may encounter a 3%-32% power overload if public charging stations open. However, Vietnam has strong wind and solar power capacity to meet electric car manufacturing needs.
Electric vehicle market potential in Vietnam
Motorcycle ownership exceeds 60% of Vietnam’s 100 million. Car ownership in Vietnam is low at 5.7% in 2023 compared to other Asian countries. Vietnam has one of the fastest-growing passenger car demand rates at 10.5%, expected to reach 9% by 2025 and 30% by 2030. Young Vietnamese and the increasing middle class appreciate cutting-edge technology, fuel economy, and environmental awareness. EV market growth in Vietnam might reach double-digits in the coming years.
The government is paving the way for EV adoption in Vietnam
Traffic and air pollution are high in Hanoi and Ho Chi Minh owing to increased demand for passenger cars, ride-sharing fleets, and gas-powered motorcycles. To minimize pollution and encourage EV adoption, the government aims to progressively outlaw motorcycles in key cities including Hanoi, Hai Phong, Danang, Ho Chi Minh, and Can Tho by 2030.
Government incentives and policies
Vietnam lacks electric vehicle policy frameworks and incentives. In its sustainable development strategy, the government promotes EVs through sustainable development, green growth, climate change, and environmental protection regulations. EV and charging infrastructure policies are continually developing, including:
- The first official national document to promote e-mobility and energy storage by worldwide trends is Resolution 55/NQ/TW, released on 11 February 2020, giving Guidelines for the National Energy Development Strategy until 2030 with a Vision to 2045.
- Following Decision 1095/QĐ-BGTVT dated June 17, 2021, the Transport Development and Strategy Institute will adopt a National Transportation Vehicle Development Strategy to promote environmentally friendly automobiles from 2022-2023.
- Approved Paris Agreement in July 2020 with updated NDC to minimize GHG emissions by 9% in 2030. EV adoption could reduce transport GHG emissions. Ho Chi Minh City will be the first to study the e-transportation development plan for e-vehicles in the southern hub under the NDC plan in January 2022.
- Refer to Decision No. 1393/QĐ-TTg from 2012 for the National Green Growth Strategy. Vehicle electrification is being considered in the Ministry of Planning and Investment’s 2021–2030 NGGS. Some provincial Green Growth Action Plans include transportation and electrification goals.
- Hanoi’s Green Growth Strategy aims to have 5% e-motorcycles in Vietnam by 2030.
- Nha Trang’s Green Growth Strategy called for 200 e-buses by 2025.
- Vietnam Automobile Manufacturers Association (VAMA) National Automobile Development Strategy (2021-2050) to boost e-vehicle production and utilization. Between 2030 and 2040, electric car production would rise to 3.5 million vehicles.
The government has recently made the following decisions to boost the EV industry in Vietnam:
On March 1, 2022, Decree 10/2022 exempted Battery Electric Vehicle registration fees for the first 3 years and reduced them by 50% for the next 2 years. Law number 03/2022/QH15, beginning March 1, 2022, reduces the battery electric vehicle excise tax rate to 1-3% for five years.
EVs in Vietnam are inevitable, and the battery industry and charging infrastructure are developing. Important private firms are pioneering, and the Vietnamese government is promoting low-carbon transport. EV manufacturing in Vietnam is promising. But the government must provide unambiguous policies, tax incentives, price subsidies, and standards, and remove technical restrictions.
