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The electric car market in Vietnam: A phenomenal growth

Vietnam is witnessing significant changes in the car market with a new player: electric cars.

A strong local producer

In Vietnam, according to data from the Vietnam Register, by August 2022, the whole country had had nearly 3,000 electric cars manufactured, assembled and imported, an increase of more than 20 times compared to 2019. Up to now, the whole country also has nearly 1.8 million electric motorbikes in operation, serving people's daily needs.

VinFast is proving its popularity and success in both the local and international markets. According to VinFast, a total of 4,278 electric vehicles were handed over to Vietnamese customers in December 2022, including 2,730 VF 8 vehicles and 1,548 VF e34s, which is considered to be the best sales level ever of VinFast electric cars. The sales of VF 8 increased by 2,318 units and VF e34 increased by 1,366 units compared to November 2022. The Vietnamese automaker explained that this increase of more than 7 times was due to the stable supply chain as well as the optimisation of the production system. In addition to VF 8 and VF e34, VinFast also plans to hand over the VF 9 and VF 5 Plus models.

Of the electric car models available in Vietnam at the present time, while only VinFast VF e34 costs less than 700 million VND (~$30k) and VinFast VF 8 costs about 1 billion VND (~$45k), the rest are all electric cars cost about 2 billion VND (~$85k) or more, exceeding the general car buying budget of the majority of consumers in Vietnam. For example, Hyundai Ioniq 5 is temporarily priced at about 2 billion VND, Audi e-tron SUV with a starting price of 2.97 billion VND, or Mercedes EQS priced from 4.8 billion VND, etc.

A great support from the government

With a population of nearly 100 million people in Vietnam, along with the current low car ownership rate, a stable GDP growth, a rapidly growing middle class, and a rapid technological development, Vietnam is predicted to be one of the markets with a huge future for electric vehicle development. The Vietnam Automobile Manufacturers Association (VAMA) forecasts that Vietnam will reach 1 million electrified vehicles by 2028 and by 2040 the number of electric vehicles will reach 3.5 million units. According to experts, the Government's collections of supportive policies such as free registration, reduction of excise tax from 15% to 3%, act as a guiding corridor for the electric vehicle industry. The Vietnamese electric car market in 2023 is very open in terms of opportunities, however, it will be very crowded because of increasing competition from both the local and international players.

In order to gradually make the commitments at COP26 come true, the Prime Minister signed Decision 876/QD-TTg dated July 22, 2022 approving the Action Program on green energy transformation, carbon emission reduction and transportation industry methane. Accordingly, the roadmap for green energy transformation for traffic by 2050 targets that 100% of road motorised vehicles to switch to electricity and green energy, at the same time, the government will complete the charging infrastructure to provide green energy nationwide.

Source: the Internet



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