Establishing a network of charging stations will boost electric vehicle consumption

“Greening” transportation by switching to electric vehicles not only contributes to reducing greenhouse gas emissions, moving towards achieving the Net Zero goal by 2050, but also helps Vietnam save up to 498 billion USD from oil imports, creating millions of new jobs…

The World Bank report “Vietnam: Proposal for a National Roadmap and Action Plan for the Transition to Electric Vehicles” said that if the charging station system is fully developed, electric vehicles could be the top choice for first-time car buyers.

However, the condition is that the necessary charging station network must be established to support the goal of using electric vehicles. Accordingly, Vietnam will need about 2.2 billion USD in 2030 to invest in developing charging stations. In the acceleration phase, this amount will reach 13.9 billion USD in 2040 and 32.6 billion USD in 2050.

Accordingly, from now until 2027, the use of electric cars (passenger cars) will focus on high-income households in Vietnam. Therefore, plans for a public charging station network to optimize efficiency should be prioritized, starting with high-value residential areas.

electric car
Establishing a network of charging stations will boost electric vehicle consumption in the Vietnamese market. Photo: Vinfast

From 2027 to 2030, the network of public charging stations in non-urban areas will need to be expanded. After 2030, the focus will shift from expanding geographical coverage to increasing density in both urban and non-urban areas to prepare for the mass use of electric vehicles after 2035, when most Vietnamese people will be able to afford to own a car.

“If the development of public charging stations in non-urban areas is accelerated, the penetration rate of electric vehicles could increase even faster, leading to an additional demand of more than 2.8 million units in 2024–2035 and 3 million units in 2036–2050,” the report estimates.

In terms of investment in developing charging station networks, many different business models have emerged around the world. However, the public-private partnership model will be the main means to attract investment in this aspect.

Original equipment manufacturers (OEMs) for electric vehicles often actively invest in charging station networks to create a favorable environment to promote the use of this type of vehicle.

Take the case of VinFast in Vietnam. In parallel with developing its own charging station infrastructure across Vietnam, billionaire Pham Nhat Vuong's V-Green Company recently announced the implementation of a franchise model in the form of "businesses and people working together". These franchised charging stations only serve owners of VinFast electric motorbikes and electric cars, similar to the genuine charging stations invested by V-Green.

In addition to electric vehicle OEMs, power suppliers, fuel distributors and dedicated charging operators may all be interested in investing in electric vehicle charging station networks.

Need policies to support charging station development

Therefore, the World Bank report suggests that the Vietnamese Government should focus on creating a policy environment that maximizes private sector incentives and business prospects related to investment in charging station networks.

This can be done through the introduction of ambitious regulations on the use of electric vehicles with a specific roadmap, setting clear technical standards for charging infrastructure, providing financial and non-financial incentives to encourage the private sector to invest in charging operations, and piloting public-private partnership business models to develop charging station networks through government-led pilot projects.

Studies of international experience show that government subsidies for charging station infrastructure can be up to 5–6 times more effective than subsidies for electric vehicle purchases.

Regarding the importance and plan for developing electric vehicle infrastructure in Vietnam, Associate Professor, Dr. Dam Hoang Phuc - Director of the Automotive Engineering Training Program (Hanoi University of Science and Technology), said that it is necessary to calculate the power source and plan where and how to distribute charging stations on the total number of electric vehicles.

When there is a clear mechanism, it will encourage investors to be willing to spend money to build and develop charging station systems nationwide. Because, in the long term, electric cars will certainly develop, investing in charging stations will be beneficial, this expert emphasized.

According to Ms. Nguyen Thi Phuong Hien - Deputy Director of the Institute of Transport Strategy and Development, the Government's current policies to support energy conversion and the process of converting to electric vehicles are very strong and clear in terms of policy.

However, the new support policies stop at special consumption tax and registration fee. In the coming time, there is a lot of work to be done in terms of policy to support successful conversion.

International experience shows that the key factor for a successful transition to electric vehicles is charging station infrastructure. Therefore, the Government's efforts and policies to support the transition to electric vehicles should focus on supporting the construction of charging stations first, Ms. Hien pointed out.

In mid-August, the Government Office issued Notice No. 372 on the conclusion of Deputy Prime Minister Tran Hong Ha at a meeting on green vehicle development policies and electric charging station development policies for green vehicles. In particular, the Deputy Prime Minister assigned the Ministry of Transport to coordinate with relevant ministries and localities to continue reviewing mechanisms and preferential policies to support investment in electric charging stations.

The Deputy Prime Minister also requested the Ministry of Industry and Trade to urgently submit to the Prime Minister for amendments and supplements to Decision No. 28/2014 regulating the structure of retail electricity prices. In particular, to study, propose and assess the impact of the electricity price support mechanism on electric charging stations.

The Ministry of Construction urgently issues and amends regulations and standards for apartment buildings and commercial centers, including regulations on electric charging systems before December 31, 2024. At the same time, coordinate with ministries, branches and localities to issue guidelines to supplement urban planning, construction planning, and provincial planning, ensuring that there are public electric charging station systems in urban areas serving green vehicles...

'Greening' with electric vehicles, the reason why Vietnam will save 498 billion USD Not only playing an important role in reducing greenhouse gas emissions, the process of converting transportation to electric vehicles can also help Vietnam save up to 498 billion USD from oil imports.