Vietnam’s EV ownership to double in 2023: report

BMI Research, a division of Fitch Solutions, anticipates that sales of passenger electric vehicles (EVs) in Vietnam will increase at least two-fold this year.

BMI analysts expect Vietnam’s passenger EV sales to expand 114.8 percent year on year to reach around 18,000 units at the end of the year, as reported by CNBC, citing BMI’s report published on August 3.

Sales for battery-powered EVs might surge 104.4 percent compared to the previous year to nearly 17,000 units, the report said. 

Plug-in hybrid vehicles, or PHEV, might jump nine-fold year over year to almost 1,100 units, according to the report. 

“We currently expect passenger EV sales in Vietnam to average annual growth of 25.8 percent over 2023-2032 to reach an annual sales volume of around 65,000 units, up from 8,400 units in 2022,” said BMI.

The proportion of passenger EVs within the overall passenger vehicle market, referred to as the penetration rate, is projected to surge to 13.6 percent by 2030, marking a substantial leap from the 2.9 percent recorded last year.

The Vietnam Automobile Manufacturers Association predicts that EV ownership will reach one million units by 2028, and 3.5 million by 2040.

EVs only accounted for a small share of the passenger car market in Vietnam last year. 

Sales of passenger cars in the Southeast Asian nation reached about 284,000, with only a few thousand being electric cars, according to Statista.

VinFast is currently the leading domestic company in the Vietnamese EV market, representing more than a half of the market share by 2022, according to BMI. 

The rest are occupied by brands from China, it added.

The report outlined that the growth momentum of the Vietnamese EV market will be strongly stimulated as VinFast steps up production throughout 2023.

However, BMI anticipates that Vietnamese EV passenger adoption will be hindered by low salaries and a lack of incentives, the report said without elaborating. 

Despite that, the battery leasing business model, which allows consumers to rent batteries when they buy new EVs, might help users lower expenses. 

This measure will increasingly attract taxi fleet operators, said the report.

In April, taxi fleet operator Green SM launched a pure EV taxi service in Vietnam, using VinFast models.

The current charging infrastructure is an additional element that may potentially restrict the expansion of Vietnam’s EV market.

Most of the charging stations are currently for electric two-wheelers, or bikes, and scooters. 

BMI expects more players to enter the market from 2023 to boost the EV charging network.

Local EV charging operator EBOOST has pledged to expand Vietnam’s charging network and will deploy more charging points.

Taiwanese electronics giant Foxconn said it would invest US$250 million, partly to build an EV charging equipment and component production plant in Vietnam, according to Taiwanese media.

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