Along with having a roadmap to convert electric vehicles, Vietnam must also consider investing in the efficiency of the power grid to supply battery charging stations.
World Bank (WB) experts have made recommendations and solutions to Vietnamese management agencies to realize the goal set by the Government that by 2030, 50% of urban transport vehicles and 100% of inner-city buses and taxis will run on electricity or green energy, and by 2050, all vehicles must use clean, electric energy.
The world's second largest electric motorbike market
At the announcement of the World Bank (WB) report on "Vietnam: Proposal for a national roadmap and action plan for the transition to electric vehicles" on the morning of November 22, according to Mr. Bowen Wang, a transportation expert at the WB, before 2035, two-wheeled vehicles are expected to still dominate the Vietnamese vehicle market, although overall demand tends to decrease.
Mr. Wang also added that Vietnam is currently the second largest market for electric two-wheelers in the world, after China, with electric two-wheelers accounting for 12% of total two-wheeler sales. The market for electric two-wheelers in Vietnam is quite diverse and vibrant, with many suppliers competing in quality and price. Consumer acceptance of this vehicle segment is quite high, especially in urban areas.
Depending on the speed and scale of implementation of relevant support policies, the WB report indicates that the market size of electric two-wheelers will reach a total of 12 million units in the 2024-2035 period to achieve the target or 16 million units if following a faster trajectory, corresponding to 42% and 56% of total two-wheeler sales in Vietnam during this period.
“The transition to electric vehicles in Vietnam will mainly take place in the two-wheeled vehicle segment from now until 2035,” Mr. Wang assessed.
In the passenger car segment, the World Bank sees that Vietnam has a great opportunity to move away from conventional gasoline and diesel cars in the process of mechanization, moving to the era of electric cars.
Although car ownership is still a luxury for most Vietnamese, electric cars have become an attractive alternative to gasoline and diesel cars for those who can afford them in general. It is forecasted that it will take another decade for electric cars to replace two-wheeled vehicles and become the mainstream vehicle in the Vietnamese consumer market. During this period, electric cars will become more competitive in price with traditional cars due to significantly improved performance.
Due to the dominance of two-wheeled vehicles, inner-city public buses account for only a very small portion of both total vehicle volume and vehicle usage rate (Hanoi and Ho Chi Minh City account for less than 10%).
To achieve the goal of 100% of inner-city public buses being electric by 2030, the WB calculated that Vietnam needs to eliminate 9,600 diesel buses currently in operation and nearing the end of their lifespan. Meanwhile, it is also necessary to add more electric buses according to the Prime Minister's Decision 876. By 2030, Hanoi and Ho Chi Minh City will need about 6,000 and 4,500 more electric buses, respectively.
"State management agencies and enterprises need to promote the supply and production of electric vehicles; implement support policy mechanisms to accelerate the elimination of gasoline and diesel vehicles; deploy a network of charging stations, etc.," said Mr. Wang.
Investing in increasing the capacity of the electricity grid
Recognizing that electric vehicle charging will affect Vietnam's electricity industry by increasing electricity consumption, the WB's forecast shows that before 2030, electric vehicle charging will not cause significant pressure on electricity production, but the impact of this will become evident after this time.
To meet the EV charging load after 2030, Vietnam will need to add an average of 3-5% of network capacity, up to 15% of additional transmission capacity by 2050 to enable 100% electrification of road transport.
To reduce the impact of electric vehicle use on the electricity sector, Vietnam must improve the efficiency of the power grid and battery use while promoting the transformation of passenger and freight transport modes; aiming to shift electric vehicle charging activities to public charging stations during the day (outside peak hours) as much as possible.
Specifically, from now until 2030, Vietnam will need to invest up to 9 billion USD in the electricity industry and 14 billion USD per year in the 2031-2050 period to produce additional electricity and expand the grid.
The transition to electric vehicles will save Vietnam up to USD 498 billion from oil imports, in the period 2024-2050. The transition to electric vehicles will create 6.5 million new manufacturing jobs by 2050, reducing the environmental costs of local air pollution by USD 30 million in 2030 and USD 6.4 billion in 2050.
Mr. Shigeyuki Sakaki, a senior transport expert at the World Bank, said that electric motorbikes consume low energy, but with many people using electric cars in the future, the power grid will have to meet this demand to promote the transition to electric vehicles. Therefore, the State management agency needs to have a practical and feasible roadmap to serve the goal of reducing about 7.2% of the contribution of the transport sector to the total greenhouse gas emissions across the economy.
“The transition to electric vehicles is a complex process that encompasses a multi-industry ecosystem, so the first step is to establish an intergovernmental body to lead and coordinate efforts to optimize and reduce costs,” Sakaki noted./.
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