Vietnam is on a journey towards the ''future of mobility'' with the Government''s green energy transformation action program setting a goal for all vehicles on the road to be powered by green energy by 2050 to meet its goal of net zero emissions. But how ready is the market for this transition?
With this whitepaper, Vero''s mobility-focused brand consulting practice explores several facets of the electric vehicle (EV) market in Vietnam: the goals that various brands are striving for, perceptions of EVs among Vietnamese consumers, and ways for brands to overcome current barriers and capitalize on the market''s potential. As communication consultants at Vero, we aim to provide our perspectives on how brands can expand in this market and get ahead of the game in the coming era of sustainable transportation.
In Vietnam, where motorbikes rule the road, the electric motorbike industry is experiencing continued growth. According to the Ministry of Industry and Trade, sales of electric motorcycles have grown by about 30-35% in recent years, making Vietnam the largest electric two-wheeler (E2W) market in the ASEAN region and the second-largest worldwide, after China.
Sales of E2Ws are predicted to eventually surpass gasoline-powered motorbikes due to growing environmental concerns and surging gasoline prices, a report from motorcyclesdata shows. According to Vero IQ, the YoY% growth rate in terms of search volume for E2W in Vietnam is 71% (data measured from Jan 2019 to Mar 2023). This data indicate that Vietnamese consumers are increasingly exploring and considering electric two-wheelers as a viable and eco-friendly means of commuting.
Yadea, the China-based "world''s largest manufacturer of electric two-wheeled vehicles," invested 100 million USD in an assembly plant in Bac Giang Province in January 2023 that is expected to produce 2 million electric motorbikes per year.
The evident success of electric motorbikes in Vietnam serves as a model for electric car brands looking to join the sustainable transportation race.
Several automotive brands have already established their presence in the local market. The EV industry is a buzz with sales-boosting initiatives by brands from mainstream to luxury brands:
In December 2021, VinFast released the VF e34, the first electric car to be produced in Vietnam as well as the first ever EV sold in the country. That historic moment marked the beginning of a new era for transportation in Vietnam. As of August 2022, nearly 3,000 electric cars had been produced, assembled or distributed nationwide, data from the Vietnam Register shows.
The Vietnam Automobile Manufacturers Association (VAMA) forecasts that Vietnam will reach 1 million EVs around 2028, and about 3.5 million EVs by 2040. According to 6Wresearch, Vietnam’s electric vehicle market size is growing at a CAGR of 22.9% during the 2020-2025 period.
While this may sound ambitious, considering Vietnam only accounts for 0.7% of total EV sales in Southeast Asia (Statista Q3 2022), new government policies and incentives are expected to further promote the use of EVs among Vietnamese consumers.
Vietnam has implemented a compelling incentive for electric cars, providing a 0% registration fee for battery electric vehicles for three years starting from March 1, 2022. Over the following two years, the registration fee will be merely 50% of what applies to petrol-fueled cars with the same seating capacity. Additionally, the special consumption tax rate for battery electric cars has been significantly reduced to just 1-3% until the end of February 2027, positioning it as a game-changing "springboard" to catalyze the growth of the EV market in the country.
EVs present a viable solution to combat environmental degradation by significantly reducing carbon emissions and air pollutants compared to traditional internal combustion engine (ICE) vehicles. Vietnamese consumers recognize this fact, as supported by a survey Vero conducted earlier this year.
Of the 91 respondents – aged 18 to 54 and split equally between males and females – two-thirds of the respondents said they had researched or considered purchasing an EV, with the majority citing environmental protection as their main purchasing driver. Reduced operating costs came in as the second factor, with 69% of respondents saying EVs are more economical than their fuel-powered alternatives.
These findings coincide with the latest report released by NielsenIQ, which showed that 55% of consumers in Vietnam value the sustainability factor in consumption, and 24% are actively living more sustainably to save money.
While the Vero survey revealed that a majority (two-thirds) of the respondents have researched or considered purchasing electric vehicles, we found some interesting insights into why EV adoption in the country remains relatively slow.
We’ll delve deeper into these current roadblocks and highlight why they must be addressed for the EV industry to gain full momentum in Vietnam.
Promoting sustainable mobility in Vietnam requires associated infrastructures, such as accessible power sources, charging stations, batteries, and battery treatment. VinFast has already installed 150,000 charging ports on about 3,000 charging stations at locations such as apartments, parking lots, highway rest stops, and gas stations. Their charging stations include 11kW normal charging stations, 30kW and 60kW fast charging stations, 250kW super-fast charging stations and 1.2kW electric motorbike charging stations.
Other brands and startups, including EBOOST and Charge+ are also installing charging stations across Vietnam to encourage the use of more EVs.
However, our survey found that the charging infrastructure gap remains a significant challenge, making potential customers hesitant to adopt electric vehicles.
In Vero''s survey, nearly 90% of those who said ''No'' to the prospect of buying an electric car cited their belief that the current network of charging stations is insufficient, which would cause them anxiety — especially on long road trips.
There''s evidently a huge task ahead for EV manufacturers and brands to place charging infrastructure at regular intervals along popular routes but also near transmission lines with the capacity to meet their electricity needs.
The Vietnamese EV market is still in its infancy, so it''s natural for consumers to be skeptical about an electric vehicle’s functionality versus the ICE automobiles they''ve been using for decades. Many of our respondents admit that they still lack overall knowledge about EVs, their technological features, and their safety. In fact, 63% of respondents said they have never ridden in or driven an EV car.
More than half of those who don''t intend to buy EVs (17 of 30 respondents) said they are unfamiliar with EVs, while 72% ranked their ability to differentiate between types of EVs as 1 (lowest score).
Educating Vietnamese consumers about electric vehicles should be a top priority for EV brands. By prioritizing education, they can bridge the information gap, dispel myths, and provide clear and transparent information about the advantages of electric vehicles, thereby empowering consumers to make well-informed decisions.
Interestingly, while more Gen Z and Millennial respondents (aged between 18 and 34) described EV as "environment-friendly" than any other age group in the survey, these young consumers were also found to be the least keen to buy an EV for themselves.
These generations currently make up more than half of the Vietnamese population and are expected to account for around 40 percent of Vietnam''s consumption by 2030. With their proficiency in innovative technologies and high social awareness, it seems conflicting that they are least interested in shifting gears when it comes to electric cars.
We have identified two behavioral patterns that are currently influencing Gen Z and Millennials'' hesitancy toward shifting to EVs:
Gen Z and Millennial consumers might not be fully enthusiastic about buying EVs at the moment, but they represent the future target market. As they age, build families, and prioritize convenience, EV brands must continuously engage and communicate with them to establish lasting connections and encourage the eventual adoption of electric vehicles.
Vietnam''s EV landscape has started off at a slow pace, but the potential for substantial growth is undeniable. Brands entering the EV race have a golden opportunity to leverage this burgeoning market by capturing early adopters, building trust, and establishing a strong foothold to reap long-term benefits.
Vietnamese electric vehicle consumers closely resemble Tesla’s initial target market. They belong at the intersection of individuals who have a passion for cars, technology, and sustainability. It''s important to break down their misconceptions about EVs, ease their green mobility shift anxiety, and guide them through the entire experience to fully penetrate the market. It''s also important to note that educating consumers on the strengths of EVs should be done without denigrating the use of gasoline vehicles.
Brands should proactively address prevalent concerns about the accessibility of charging stations and the safety of electric vehicle batteries. Doing so can enhance consumer confidence by assuring them that convenience and peace of mind can be part of traveling in an EV, regardless of the distance, weather, or road conditions.
Another potential strategy is to showcase EV models in Vietnam before they are available for commercial purchase to build hype and gauge consumer interest. This can be done through media coverage highlighting the themes of innovation and sustainability. The target audiences for this approach would include fleet managers and consumers.
To foster greater familiarity and enthusiasm, brands should actively promote test drive activities aimed at educating customers on driving techniques and the intricacies of EV technology. Additionally, they can introduce programs like "EVs for rent," which allow interested customers to experience driving an electric car firsthand and assess its suitability for their individual needs.
Electric car brands that aim to enter the market must understand the needs and preferences of Vietnamese consumers, including factors such as pricing, design, and convenience.
About Hanoi electric vehicle adoption
As the photovoltaic (PV) industry continues to evolve, advancements in Hanoi electric vehicle adoption have become critical to optimizing the utilization of renewable energy sources. From innovative battery technologies to intelligent energy management systems, these solutions are transforming the way we store and distribute solar-generated electricity.
When you're looking for the latest and most efficient Hanoi electric vehicle adoption for your PV project, our website offers a comprehensive selection of cutting-edge products designed to meet your specific requirements. Whether you're a renewable energy developer, utility company, or commercial enterprise looking to reduce your carbon footprint, we have the solutions to help you harness the full potential of solar energy.
By interacting with our online customer service, you'll gain a deep understanding of the various Hanoi electric vehicle adoption featured in our extensive catalog, such as high-efficiency storage batteries and intelligent energy management systems, and how they work together to provide a stable and reliable power supply for your PV projects.
