Major automakers race to tap Vietnam EV market

Vietnam’s emergence as a major electric vehicle (EV) market in Southeast Asia is reflected in the rush of new models being introduced by leading automakers.

The automakers are looking to tap rising demand as Vietnam proceeds towards its 2050 zero emissions target.

Just two days after Vietnam’s leading EV maker VinFast broke ground on its $4 billion facility in North Carolina where production is expected to begin in 2025, BMW and Hyundai Motor unveiled on Monday their first EVs for the Vietnamese market.

BMW introduced two all-electric models, i4 and iX3, in the southern province of Binh Duong via its exclusive country distributor Thaco. Both mid-size cars are five-seaters.

The iX3 is one of the first zero emissions BMW X SUV models. Meanwhile, the i4 stands out from the other models in that it seeks to replicate BMW’s much-loved sports sedan with an all-electric powertrain.

Currently, no BMW electric cars are made in Vietnam though the German giant announced last December the production in Vietnam of the BMW 3 and 5 Series as well as BMW X3 and X5 (all fossil fuel cars) at the Thaco Chu Lai Industrial Park in Quang Nam province. The made-in-Vietnam products have not been launched to date.

Hyundai Thanh Cong Vietnam (HTV), a joint venture established in 2017 between by South Korea’s Hyundai Motors and Vietnamese conglomerate Thanh Cong Group, said Monday it has started Vietnam sales of its all-electric Ioniq 5 model, made at the second HTV manufacturing facility in the northern province of Ninh Binh, which was inaugurated last November.

Hyundai is a leading car brand in the Vietnamese market. HTV has produced the Grand i10, Avante, Tucson and Santa Fe models at the first HTV plant in the same province. Based on the brand’s success, the joint venture built its second factory at a total cost of $129 million.

Meanwhile, Nissan Vietnam of Japanese carmaker Nissan has completed the registration process for industrial design protection of all-electric SUV Nissan Ariya made in Japan. Nissan Vietnam has not disclosed when this model will be sold in Vietnam.

At present, the Czech Republic’s carmaker Skoda is building a car plant in Quang Ninh province under a partnership with the Thanh Cong Group – domestic partner of Hyundai Motor in the HTV joint venture.

The new plant will assemble Skoda models Kushaq and Slavia from 2024 with parts provided by Skoda's production plant in India, the Czech company stated in April. It also said that the Skoda brand’s fully-electric Enyaq iV will also make its Vietnam debut at a later, unspecified date.

On June 29, Quang Ninh officials granted investment certificates to two projects proposed by Taiwanese tech giant Foxconn with a total registered capital of over $246 million. One of the two projects is based on Foxconn’s EV business.

The 6.3-hectare FECV Foxconn Quang Ninh factory, with an investment of $200.24 million, is set to begin operations in January 2025, employing 1,200 people. It will manufacture and assemble electronic components, chargers and charger controllers for EVs.

The other project, the 4.1-hectare, $46 million FMMV Foxconn Quang Ninh factory, is scheduled to begin operations in October 2024, employing 700 people. It will manufacture components for communications and IT products.

BYD, dubbed China’s Tesla, is also planning to manufacture EVs in Vietnam for both the domestic and the larger ASEAN market, BYD chairman Wang Chuanfu said at a May meeting with Deputy Prime Minister Tran Hong Ha. He asked the government to facilitate completion of procedures for its Vietnam investment expansion plans.

South Korean giant LG Electronics has ramped up research and development in Vietnam to serve the LG group’s rapidly growing EV-related business. LG Electronics inaugurated a new R&D facility in Hanoi this March, saying it would nurture its existing auto parts-focused R&D center that has been running since 2016.

The above developments indicate that the EV market is gathering pace in Vietnam. It was only two years ago, in 2021, that VinFast launched its first EV for the domestic market, the e34 compact crossover. Its global expansion began in 2022 when VinFast opened showrooms in the U.S., Canada, and Europe, becoming the world’s first global Vietnamese EV company.

VinFast announced Friday that it plans a stock market listing in the U.S. this month. It broke ground the same day on its $4 billion EV and battery manufacturing complex in North Carolina. The U.S. Securities and Exchange Commission (SEC) has given VinFast the green light to proceed with its proposed SPAC deal.

In May, VinFast had announced it would go public through a $27 billion (equity value of $23 billion) business combination arrangement with special purpose acquisition company (SPAC) Black Spade Acquisition Co.