Vietnam’s electric vehicle (EV) industry is set to see strong growth, with sales expected to reach around 18,000 units this year, according to a recent report. VinFast, a Vietnamese EV manufacturer, is leading the trend and is working to expand its reach in the US market.
“In 2023, we expect Vietnam’s electric passenger vehicle sales to increase by 114.8% year-on-year to around 18,000 units,” according to a recent report by BMI Research, a research unit of UK-based market research firm Fitch Solutions.
“Specifically, Vietnam’s battery electric vehicle (BEV) sales are expected to increase by 104.4% to nearly 17,000 units, while plug-in hybrid electric vehicle (PHEV) sales could reach 1,100 units this year. In 2022, passenger EV sales will be around 8,300,” the report said.
“We now expect EV passenger vehicle sales in Vietnam to grow at an average annual rate of 25.8% over 2023-2032, reaching annual sales of around 65,000 units, up from 8,400 units in 2022,” BMI said.
The penetration rate of passenger electric vehicles, i.e. sales of passenger electric vehicles compared to total passenger vehicle sales in Vietnam, is expected to increase to 13.6% in 2030, many times higher than the 2.9% in 2022.
Electric vehicles will only account for a small share of the passenger car market in Vietnam in 2022. According to Statista, passenger car sales in Vietnam will be around 284,000 units in 2022, and only a few thousand of them will be electric vehicles.
However, Vietnam's electric vehicle market is expected to boom in the 2023-2032 period, as brands such as VinFast, Wuling HongGuang, Skoda and Hyundai ramp up production, the BMI report said.
The Silver Queen ship docked at Benicia, California on December 20, 2022, carrying the first 999 VinFast VF 8 electric cars to the US. Photo: The Investor
According to BMI, Vietnam's passenger electric vehicle market is currently dominated by VinFast with more than 50% market share by 2022. The rest of the market is held by Chinese brands.
In May, VinFast said the company expected to sell 50,000 electric cars this year to serve the North American and European markets.
According to billionaire Pham Nhat Vuong, VinFast is preparing to add two new models to its product line. These models will have extremely low prices, at 10,000-12,000 USD.
VinFast shipped its first batch of 999 EVs to the U.S. late last year. The company also broke ground on a 1,800-acre EV factory in North Carolina in July, which is expected to create thousands of jobs and help the company achieve its goal of expanding its reach in the U.S. market.
Vietnam has set a goal of becoming a regional EV manufacturing and export hub with an annual production capacity of one million units and sales of 900,000 EVs. The Vietnam Automobile Manufacturers Association (VAMA) forecasts that electric vehicle ownership could reach one million units by 2028 and 3.5 million by 2040.
To encourage the use of electric vehicles, the Vietnamese Ministry of Transport has proposed subsidies of up to $1,000 for customers. The ministry also proposed exemptions and reductions in import taxes on production equipment to support electric vehicle manufacturing and assembly enterprises.
Although expected to grow strongly this year, the use of electric vehicles in Vietnam will still face many challenges, as many people's incomes are still low, and Vietnam's charging infrastructure is inadequate.
BMI's report recommends that Vietnam adopt a battery leasing business model to make electric vehicles affordable for consumers and attract taxi fleet operators .
Nguyen Tuyet (According to CNBC, International Business Times, Energy Portal)
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