It is estimated that about 12.3 billion USD is needed to invest in enough charging stations to help electric cars become popular in Vietnam, according to HSBC Bank.
The report “Vietnam At A Glance: The Story of Electric Vehicles” by HSBC Bank assesses that Vietnam’s electric car market has great untapped potential, considering the context that more than 60% of people own motorbikes and 5 cars. .7%.
Previously, the Vietnam Automobile Manufacturers Association (VAMA) also predicted that there would be 3.5 million electric cars on the road by 2040.
However, HSBC believes that manufacturers will face challenges when they want to popularize electric cars, because users are hesitant when charging station coverage is not much, batteries and car prices are high.
Therefore, this bank believes that infrastructure development will be the key to the development of electric cars. HSBC estimates that Vietnam needs about 12.3 billion USD of investment and 14tWh of cumulative energy in the period 2024-2040, to have enough charging stations and renewable electricity generation capacity for electric vehicles.
Currently, the country has nearly 150,000 electric vehicle charging ports, according to Vietnam Electricity Group (EVN). However, the stations are mainly located in apartment buildings, shopping centers, parking lots, and gas stations.
Charging stations on highways are very limited. Therefore, increasing investment in charging stations in this area will help users feel more secure when choosing electric vehicles as their main means of transportation.
A charging station for electric cars at a gas station in Hai Phong. Image:Mr. Minh
Besides infrastructure, price obstacles can be resolved through tax policies and subsidies for buyers. Vietnam has reduced import taxes, waived registration fees for car buyers and corporate income tax for investment projects in this type of vehicle.
The Ministry of Transport once proposed a subsidy policy of 1,000 USD for each electric car buyer, but the Ministry of Finance opposed it. For comparison, in the region, Thailand subsidizes up to 2,900 USD, Indonesia subsidizes 25-50% for 36,000 passenger electric vehicles by 2023.
In addition, this sector’s ecosystem can be strengthened by taking advantage of the world’s second-largest rare earth reserves and cooperating with foreign businesses in the supply chain, according to HSBC.
There has been some movement. VinFast’s parent company cooperates with Gotion High-Tech (China) to develop several types of LFP (Lithium iron phosphate) batteries and build 2 battery factories in Ha Tinh, expected to operate in the third quarter.
In early April, Chery Automobile announced the construction of an 800 million USD electric vehicle factory through a joint venture with Geleximco. The factory in Thai Binh has an expected capacity of 200,000 vehicles per year after completion in the first quarter of 2026.
“If we take advantage of cooperative relationships and overcome barriers to popularizing electric vehicles, Vietnam has the potential to accelerate in the race to greenize transportation,” HSBC research said.
While cars still have many challenges, the electric motorbike market is forecast to be more favorable due to affordable prices and high localization rate. Vietnamese people are also familiar with motorbikes, when there is only one car for every 30 vehicles. But HSBC predicts that sales of this type will flatten by 2030 when the market is saturated.
In the process of electrifying two-wheeled vehicles, the market share of Japanese enterprises is expected to decrease because they are replaced by domestic manufacturers. Currently, domestic electric motorbike manufacturers include VinFast, Selex Motors and Dat Bike.
In total, Vietnam’s electric vehicle sales (motorbikes and cars) are forecast to reach 2.5 million units by 2036, an increase of more than twice the current rate, according to HSBC.
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