Bring many economic benefits

To achieve the goal of “greening” the transport sector, the World Bank’s report “Vietnam: Proposal for a national roadmap and action plan for the transition to electric vehicles” suggests that electric vehicle sales must reach 78 million units by 2050.

“The transition to electric vehicles will bring benefits across the economy, while improving the country's energy security,” the report said.

Accordingly, one of the direct impacts of switching to electric vehicles is the reduction of gasoline and diesel consumption of vehicles using internal combustion engines. This is especially important for Vietnam, a country that is a net importer of fossil fuels.

Based on the usage characteristics of different vehicle segments and their energy efficiency, it is estimated that Vietnam has benefited from reduced fuel demand due to the transition to electric vehicles in the two-wheeled vehicle segment. In 2022, the number of electric two-wheeled vehicles in circulation in Vietnam has helped reduce about 390 million liters of gasoline.

electric car.jpg
According to the accelerated carbon emission reduction scenario, switching to electric vehicles will help Vietnam save 498 billion USD from oil imports. Photo: Vinfast

If the use of electric vehicles follows the SPS roadmap (policy scenario) by 2050, Vietnam will reduce the consumption of 306.401 million liters of gasoline and 409.416 million liters of diesel compared to the "no electric vehicle scenario".

According to the ADS roadmap (accelerated carbon emission reduction scenario), the total amount of gasoline and diesel saved by 2050 is about 360.939 million liters and 524.471 million liters, respectively. This will help Vietnam reduce its dependence on oil imports, saving the economy about 498 billion USD in the period 2024-2050.

Not to mention, switching to electric vehicles will create about 6.5 million new manufacturing jobs in Vietnam by 2050, as well as many jobs in the maintenance and repair of electric vehicles.

Furthermore, switching to electric vehicles could help Vietnam reduce the cost of environmental damage due to local air pollution by US$30 million in 2030 and US$6.4 billion in 2050.

Has a big impact on reducing greenhouse gas emissions

In addition to the economic benefits, Mr. Bowen Wang - the main author of this report also emphasized that electric vehicles have a limited role in achieving the 2030 Nationally Determined Contribution (NDC) targets, but will play an important role in achieving the zero emission target by 2050.

In the NDC, Vietnam has set an unconditional greenhouse gas emission reduction target of 64.8 million tonnes of CO2 equivalent (MtCO2eq) by 2030 from the energy-related sector, including the transport sector. With international support in technology and finance, this target can be increased to 227.0 MtCO2eq.

Achieving the EV penetration targets under Decision 876 will result in a greenhouse gas emission reduction of 5.3 MtCO2eq by 2030. This reduction contributes about 8% to the unconditional emission reduction target set for the entire energy-related sector in the NDC.

However, the emission reduction impact of the transition to electric vehicles by 2030 will be modest, as the majority of electric vehicles will be electric two-wheelers. Meanwhile, the segment that will dominate road transport emissions by 2030, freight trucks, has not yet entered a phase of rapid electric vehicle penetration.

However, after 2030 and especially from 2035, when the transition of electric vehicles in Vietnam shifts from 2-wheelers to cars, trucks and inter-provincial buses, the impact of emission reduction will increase rapidly.

If all the electric vehicle targets under Decision 876 are achieved, the total greenhouse gas emission reduction from switching to electric vehicles will be around 226 MtCO2eq, equivalent to a 60% reduction compared to the baseline scenario in the NDC by 2050, the World Bank report forecasts.

Notably, the transition to electric vehicles does not need to wait for the electricity sector to decarbonize to have an impact.

Historically, Vietnam’s electricity generation has relied heavily on fossil fuels, primarily coal and gas. Vietnam has also set ambitious targets in its current Power Development Plan VIII to significantly expand renewable energy capacity and shift from coal to gas.

Accordingly, emissions from the electricity sector can be reduced even more as the process of greening the grid continues. The process of decarbonizing the electricity sector has a specific plan, but it will take time.

The report “Vietnam: Proposal for a national roadmap and action plan for the transition to electric vehicles” affirms that the transition to electric vehicles will create a significant impact on reducing greenhouse gas emissions, regardless of the structure of electricity supply on the grid. Because the energy efficiency of electric vehicles is much higher than that of gasoline and diesel vehicles.

The modelling results in the study show that emissions from the generation, transmission and distribution of electricity from the power system to charge electric vehicles can be easily offset by avoiding the burning of fossil fuels in gasoline and diesel cars.

Even if the share of electricity sources in the grid remains unchanged from 2022 levels, the transition to electric vehicles alone would generate a net emission reduction of 2.2 million tonnes CO2eq by 2050. If the grid greening target under Power Plan VIII is fully achieved, the net emission reduction from the transition to electric vehicles would be 5.3 million tonnes CO2eq by 2050.

Currently, road transport is the largest contributor to greenhouse gas emissions, accounting for about 85% of emissions from the transport sector.

In particular, the combustion of gasoline and diesel by vehicles using internal combustion engines emits a significant amount of air pollutants such as nitrogen oxides, sulfur oxides and particulate matter with a diameter of 10 micrometers or less (PM10). These emissions contribute to local air pollution, leading to serious environmental damage and threatening people's health.

Therefore, the key benefit of switching to electric vehicles is to avoid the emission of air pollutants from the operation of internal combustion engine vehicles by switching to electric vehicles.

The Vietnamese market must consume 78 million new electric vehicles to 'green' transportation. To complete the goal of greening the transportation industry, contributing to bringing net emissions to zero, electric vehicle sales in the Vietnamese market from now until 2050 must reach 78 million units.