The VinFast automobile manufacturing factory, invested by Vingroup, was officially put into operation at the Đình Vũ Industrial Park in the northern port city of Hải Phòng in June 2019. — Photo courtesy of VinFast

Vietnam is experiencing a strong shift towards electric vehicles (EVs) and hybrid vehicles. The supportive and preferential policies implemented by the Government, such as the exemption of registration fees and reductions in special consumption tax for EVs, have played a significant role in promoting the adoption of electric vehicles in the country.

The increase in the number of electric vehicles from 138 units in 2019 to over 28,000 electric vehicles and 3,557 hybrid vehicles in September 2023 is a clear indication of the growing interest in these vehicles among consumers. In addition, the presence of more than two million electric motorbikes further demonstrates the popularity of electric-powered transportation options in Việt Nam.

The forecast for the domestic electric vehicle market to make a leap from 2024 is encouraging. With the participation of both domestic and foreign car manufacturers, the market is expected to expand further. VinFast, along with other automobile companies operating in the country, is gradually transitioning to electric vehicles and "green" energy-powered vehicles.

Many domestic car makers have already introduced hybrid car models to the Vietnamese market. Brands like Honda, Kia, Hyundai, BMW and Toyota have brought hybrid options such as the Honda CR-V, Kia Sorento, Hyundai Santa Fe, BMW XM, Toyota Yaris Cross, Corolla Altis and Innova Cross to the market. This diverse range of hybrid models provides consumers with more choices and contributes to the overall growth of the electric vehicle market in Việt Nam.

Chinese car manufacturers are looking to re-enter the Vietnamese market by introducing new electric and hybrid car models. These manufacturers have committed to a long-term development roadmap, including investing in manufacturing and assembly plants in Việt Nam through strategic partnerships.

The Vietnamese Government has issued regulations promoting the use of electrified vehicles to address declining air quality and promote green economic development. Preferential policies have been implemented to support the electric car manufacturing and assembly industry, as well as policies to encourage the use of electric vehicles. However, challenges such as incomplete awareness of businesses about green energy conversion, lack of charging station infrastructure, and insufficient mechanisms to encourage consumption and use of electric vehicles still exist.

An electrified vehicle exhibition held recently in Hà Nội provided consumers with the opportunity to test drive and learn about EV technology. The exhibition showcased electrified vehicle product lines and accessories from major brands in Việt Nam, offering consumers a different perspective on green vehicles.

According to representatives of the Vietnam Automobile Manufacturers Association (VAMA), the transition to electrified and environmentally friendly vehicles is vital. Price remains a significant factor, with electric cars generally being more expensive due to the high cost of batteries. VAMA suggests that the transition to electric vehicles should be approached in a balanced manner to avoid disrupting the market.

Vietnamese VinFast's VF7 model displayed at the electrified vehicle exhibition in Hà Nội.

Head of the VAMA Policy Subcommittee Nguyễn Trung Hiếu predicts that the trend of using electric vehicles will continue to grow in 2024, with increased consumer demand. While the entry of Chinese car manufacturers may not significantly impact the market share of Vietnamese electric car company VinFast, it will contribute to the expansion of the electric car segment in the market. VinFast primarily targets customers looking to convert from traditional car brands to electric vehicles.

Automobile expert Lê Trường Giang suggests that despite the challenges faced by the global auto industry, the trend of shifting towards electric cars will continue strongly in 2024. Giang predicts many new electric car models will be launched in the local market. — VNS