Vietnam EV market set to grow 26% per year in coming decade

Vietnam’s electric vehicle (EV) market can see an annual sales growth of almost 26% to reach around 64,500 units in 2032, according to BMI, a Fitch Solutions company.

Initially, the market would be impacted by low incomes and lackluster incentives, but it will end up growing strongly in the coming decade (2023-2032) with local production of domestic and foreign brands like VinFast, Wuling HongGuang, Skoda, and Hyundai, a BMI report says.

Other factors backing the EV market growth include the development of the energy market, it adds.

BMI estimates that the number of EVs can increase from 8,364 in 2022 to 64,497 in 2032, from 2.9% to 13.6% of total vehicles in the market. It projects the number of passenger battery electric vehicle sales at 56,242 in 2032, and that of passenger plug-in hybrid electric vehicles at 8,255.

The BMI report forecasts EV sales in Vietnam to double year-on-year to 17,964 units in 2023 – 16,886 battery electric vehicles (BEV) and 1,078 plug-in hybrid vehicles (PHEV). It attributes the strong growth in BEV to VinFast, a subsidiary of Vietnam’s largest private conglomerate Vingroup. In 2022, VinFast dominated the Vietnamese market with over 50% of the market share as it started the delivery of its VF5 Plus model. Then in March 2022, Vingroup established the GSM (Green-Smart-Mobility) JSC to offer electric car and motorbike rental and taxi services.

The report says the two-wheel electric vehicle segment would continue to dominate the market given the country’s high ownership of motorbikes, with about two million units sold last year.

It expects the number of charging points to grow from under 27,000 in 2023 to 390,000 in 2032. At the moment, VinFast dominates the sector by far, but more players are set to enter the market. For instance, Foxconn will invest $200 million to build a factory for manufacturing and assembling electronic components, chargers, and charger controllers for electric vehicles in the central province of Quang Ninh.