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A phenomenal growth of the electric vehicle market in Vietnam

The electric vehicle market in Vietnam is expected to grow significantly, in both the sales of electric bikes and electric cars.

In 2021, the number of electric vehicles in Vietnam was 17 million vehicles, an increase of 2.5 times compared to 2019. According to data from the Registry Department, although the proportion of domestically produced electric motorcycles and scooters accounts for a small proportion, about 7% annually, it maintains a steady growth rate. In addition, electric car import activities of companies into Vietnam have a significant growth rate, as 2020 recorded an increase of about 500% in the number of imported electric cars compared to 2019.

Source: VinFast

In the past 2 years, many car manufacturers have been introducing electric motor product lines, using clean energy. Vietnam currently has VinFast with electric motorbikes, electric buses and electric cars. Besides the domestic electric car brand VinFast, many major automakers have planned to enter Vietnam: KIA introduced the EV6 model, Hyundai launched IONIQ 5, Audi launched the e-tron GT. At the Vietnam Motor Show 2022, a series of electric cars were first revealed as a move of companies, such as Mercedes-Benz EQS with two versions EQS 450+ and EQS 580 4MATIC, Lexus with LF-Z, Toyota with bZ4X… However, all of the above automakers produce mid-range to high-end electric cars with high prices.

In a report by BMI Research, it is expected that the electric vehicle market in Vietnam will become extremely exciting, possessing strong growth potential in 2023. Passenger electric vehicles (EVs) sold in 2023 is expected to be 18,000 units, an increase of 114.8% over the same period last year. Accordingly, battery electric vehicle (BEV) sales in 2023 are expected to increase by 104.4%, reaching nearly 17,000 units. Besides, plug-in hybrid electric vehicle (PHEV) sales may reach about 1,100 units this year. BMI expects that sales of passenger electric vehicles in Vietnam will increase on average by about 25.8%/year in the period 2023 - 2032, of which, total annual sales will be about 65,000 units. In addition, BMI also forecasts that the penetration rate of passenger electric vehicles compared to total passenger vehicle sales is expected to increase by 13.6% by 2030, nearly 5 times higher than in 2022. The Vietnam Automobile Manufacturers Association also predicts that the number of electric vehicles owned in Vietnam will reach 1 million by 2028 and 3.5 million by 2040.

According to BMI, the electric car market in Vietnam is currently dominated by VinFast, holding more than 50% of the market share in 2022, the rest is held by Chinese brands. Research shows increased electric vehicle production in the Association of Southeast Asian Nations is also driving growth. In January, the Vietnamese government said it would continue to exempt imports of complete cars from the 10-member Southeast Asia bloc until the end of 2027.

Regarding motorbikes, the data from the Ministry of Industry and Trade shows that electric motorbike sales in Vietnam have increased by about 30 - 35% in recent years, making Vietnam the largest electric motorbike market in ASEAN and second only to China. If the Vietnamese electric car market is only in its early stages, consumers are no longer unfamiliar with electric motorbikes and electric bicycles. In addition to the brands that have been present in Vietnam for many years such as Pega (formerly HK Bike), Yadea, Asama, etc., the electric motorcycle market has also become promising for young brands and startups such as Dat Bike, VinFast, Selex Motors, Evgo, etc.

In fact, the proliferation of electric motorbikes is directly affecting the sales of gasoline motorbikes. According to a report by the Vietnam Association of Motorcycle Manufacturers (VAMM), Vietnam's motorcycle sales in the first quarter of 2023 witnessed a decrease of 15.78% over the same period. According to Lao Dong newspaper, commenting on the cause of the decline in the Vietnamese motorcycle market, the leader of Yamaha Vietnam Company mentioned 3 main reasons: Vietnam currently has a policy to limit the number of motorbikes while in the past time, electric vehicles have had strong growth and the automobile market has expanded. In a report from, in the face of the impact of rising gasoline prices and environmental issues that are increasingly concerned by consumers, sales of electric motorcycles are expected to surpass gas engine vehicles. According to Vero IQ, the percentage of users searching for electric motorbikes grows annually at 71% (statistics from January 2019 to March 2023).

Regarding the electric charging station system, according to the Ministry of Transport, VinFast has developed a system of charging stations with more than 150,000 charging ports for electric motorcycles and electric cars in 63 provinces and cities. As of October 14, 2022, VinFast had installed 1,560 electric charging stations nationwide. EVIDA Company also has more than 850 charging points, and Vietnam Electricity Group (EVN) also handed over 6 charging stations to customers.

The government also creates a number of supporting policies to promote the growth of electric vehicles in Vietnam. Recently, the Ministry of Transport proposed a number of specific policies to encourage the production and assembly of electric cars, including:

  • Adding the profession of manufacturing and assembling electric cars and electric car batteries to the professions in the field of special investment incentives.

  • Continue to apply the special consumption tax rate for electric cars with 9 seats or less at 3% after February 28th, 2027 for domestically produced and assembled electric cars. VAT exemption for the first 5 years, 50% reduction for the next 5 years.

  • Exemption and reduction of registration fees for electric cars in the first 5 years from March 1, 2022. Within the next 2 years (from March 1, 2027), the first registration fee is equal to 50% of the fee for gasoline and diesel cars with the same number of seats.

  • Exemption of license fees for the first 3 years, 50% reduction of license fees for electric cars for the next 2 years.

  • Subsidise people with an amount of about 1,000 USD/car when buying an electric car to shift consumption behavior from gasoline and diesel cars to electric cars.

  • Exemption from import tax on components and equipment for the installation of electric charging stations. Land tax exemption for the first 5 years, 50% reduction in the next 5 years. Corporate income tax exemption for the first 5 years and 50% reduction for the next 5 years. Preferential selling price of electricity equal to the price of electricity in service of production.

Source: the Internet



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