Vietnam needs $12B investment in EV infrastructure: HSBC

By Vien Thong May 10, 2024 | 06:25 pm PT

An electric vehicle charging station within a gas station in Hai Phong City. Photo by Anh Minh

Vietnam will need to invest around US$12.3 billion in infrastructure to popularize electric vehicles, lender HSBC has estimated in a new report.

Developing EV infrastructure could solve the main issues deterring people from buying the vehicles, like limited charging stations, costly batteries and high vehicle prices, "Vietnam at a glance" said.

The electric car market in Vietnam had a lot of room for growth, considering that only 5.7% of the country’s population owned a car.

The electric motorbike market was forecast to grow faster than its four-wheel counterpart due to lower prices, but would become saturated by 2030.

Vietnamese are also familiar with two-wheel vehicles, with 60% of the population owning at least one.

During the electrification of two-wheelers, the market share of Japanese companies was expected to decrease and replaced by domestic manufacturers such as VinFast, Selex Motors and Dat Bike.

The combined annual sales of electric cars and motorbikes would exceed 2.5 million units in 2036, more than double the current figure.

According to national utility Electricity Vietnam, around 150,000 EV charging facilities are in operation in the country, most of them in apartment buildings, shopping malls, parking lots, and gas stations.

The HSBC report said charging stations on highways were few and far between, and so investing in more stations would prompt more consumers to choose EVs as their primary transportation.

To promote EVs, the government provided tax incentives, subsidies and other support, including reduced import taxes and zero registration fees, for the industry and users.

Domestic EV makers collaborated with foreign businesses to boost production.

VinFast's parent company had been working with Chinese battery producer Gotion High-Tech to develop several types of LFP (lithium iron phosphate) batteries and build two battery plants in Ha Tinh Province, which were expected to start operating in the third quarter of 2024.

Last month Chinese EV producer Chery Automobile announced the construction of an $800 million electric car factory in Thai Binh Province in a joint venture with Vietnamese conglomerate Geleximco.

The factory was expected to start operations in the first quarter of 2026, producing 200,000 vehicles a year.

"If Vietnam leverages these partnerships to popularize EVs, it can make significant progress in greening transportation."