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Jul 20, 2023

Vietnam's Electric Vehicle Adoption Expected to Reach 13.6% by 2023

Vietnam’s electric vehicle (EV) adoption is projected to increase to 13.6% in 2023, a significant jump from the 2.9% recorded the previous year, according to a report by BMI Research. While EVs

Vietnam’s electric vehicle (EV) adoption is projected to increase to 13.6% in 2023, a significant jump from the 2.9% recorded the previous year, according to a report by BMI Research. While EVs currently have a small share in Vietnam’s passenger car market, the research company anticipates robust growth in 2023.

The growth in EV adoption is expected to be driven by increased deliveries of VinFast vehicles, as the local EV maker ramps up production in 2023. Additionally, the availability of affordable China-made EVs will contribute to the expansion of the market.

BMI Research forecasts a 114.8% year-on-year increase in passenger EV sales in 2023, reaching approximately 18,000 units. Battery electric vehicles (BEVs) are projected to surge by 104.4% compared to the previous year, while plug-in hybrid vehicles (PHEVs) could see a nine-fold increase to nearly 1,100 units.

The report estimates an average annual growth rate of 25.8% in passenger EV sales from 2023 to 2032, reaching an annual sales volume of around 65,000 units by the end of the period. The penetration rate of passenger EVs is anticipated to reach 13.6% by 2030, a significant increase from the previous year’s 2.9%.

Vietnam’s EV market is currently dominated by VinFast, which holds over 50% market share in 2022. The market also includes various Chinese brands. The affordability of China-made EVs, particularly the Wuling HongGuang Mini EV priced at $10,065, is expected to drive growth in the passenger EV segment.

To support the growth of EVs in Vietnam, the government has extended the exemption on import tax for completely built-up cars from the Association of Southeast Asian Nations until the end of 2027. However, there are challenges to overcome, such as low incomes and a lack of incentives for EV adoption. The report suggests that battery leasing and the involvement of taxi fleet operators could help address these challenges.

Furthermore, the charging infrastructure in Vietnam may limit the growth of the EV market. Most charging stations currently cater to electric two-wheelers, but BMI expects the entrance of more players in the market from 2023 to enhance the EV charging network. Local EV charging operator EBOOST plans to expand the charging network, and Taiwanese electronics giant Foxconn will invest in building an EV charging equipment and component production plant in Vietnam.

Overall, Vietnam’s EV adoption is expected to experience significant growth in the coming years, driven by increased vehicle supply, favorable government policies, and efforts to expand the charging infrastructure.