Electrifying Transportation in Vietnam: Challenges and Opportunities

Vietnam’s electric car market has significant potential, but manufacturers face challenges in popularizing them due to a lack of charging stations, high battery and car prices. To accelerate the transition to green transportation, HSBC estimates that the country needs significant investment and energy resources to support electric vehicles from 2024 to 2040.

Currently, there are nearly 150,000 electric vehicle charging ports in Vietnam, mainly 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. Investing in charging stations in key areas can boost user confidence and encourage more people to choose electric vehicles as their primary mode of transportation.

To address price barriers, Vietnam has implemented tax policies and subsidies for electric car buyers. While there have been some challenges, progress has been made in the sector. For example, partnerships between Vietnamese and foreign companies have led to the development of electric vehicle components. HSBC believes that Vietnam has the potential to excel in the transition to green transportation by leveraging partnerships and addressing barriers to electric vehicle adoption.

In addition to cars, the electric motorbike market in Vietnam is forecasted to thrive due to affordability and a high localization rate. Vietnamese people are more familiar with motorbikes than cars, which contributes to the potential growth of the electric motorbike market. Domestic manufacturers are expected to play a significant role in electrifying two-wheeled vehicles with sales projected to increase significantly by 2036.

Overall, HSBC predicts that Vietnam’s electric vehicle market will continue to grow, with sales projected to reach 2.5 million units by 2036 if infrastructure and pricing challenges are addressed effectively.