Electric Vehicles in Vietnam: How Charging Stations and Affordable Options are Driving the Market Forward
According to a report by HSBC Bank, Vietnam could require an investment of approximately 12.3 billion USD to develop enough charging stations to support the growing popularity of electric cars in the country. The report “Vietnam At A Glance: The Story of Electric Vehicles” highlights the untapped potential of Vietnam’s electric car market, given that more than 60% of people own motorbikes and only 5.7% own cars. Previously, the Vietnam Automobile Manufacturers Association (VAMA) predicted that by 2040, there would be 3.5 million electric cars on the road.
However, HSBC suggests that manufacturers may face challenges in promoting electric cars due to users’ hesitancy caused by the lack of charging stations and high battery and car prices. To address these barriers, significant investment and energy resources will be required for the growth of electric vehicles from 2024 to 2040.
Currently, Vietnam has nearly 150,000 electric vehicle charging ports, primarily located in residential areas, shopping centers, and parking lots. However, there is a lack of charging stations on highways, which presents a barrier to widespread adoption of electric vehicles. By investing in charging stations in key areas such as highways or urban centers, users may feel more confident in choosing electric vehicles as their primary mode of transportation.
To tackle price barriers, Vietnam has implemented tax policies and subsidies for electric car buyers. Despite some challenges, progress has been made in the sector through partnerships between Vietnamese and foreign companies to develop electric vehicle components. HSBC believes that Vietnam has immense potential to excel in transitioning to green transportation by leveraging partnerships and addressing barriers to electric vehicle adoption.
In addition to electric cars, the electric motorbike market in Vietnam is expected to thrive due to affordability and a high localization rate. Vietnamese people are more familiar with motorbikes than cars; this contributes significantly to the potential growth of the electric motorbike market. Domestic manufacturers are expected to play a crucial role in electrifying two-wheeled vehicles with sales forecasted to increase significantly by 2036.
Overall, HSBC predicts that Vietnam’s electric vehicle market will continue its growth trajectory with sales projected at approximately 2 million units by 2036 if infrastructure development addresses price and ecosystem challenges effectively.
