Vietnam transport companies scramble to adopt EVs

The Weaver++ electric motorbike made by Dat Bike was added to its fleet for the first time last week by ride hailing company Gojek.

The Indonesian-owned company expects an electric bike’s operating costs to be a quarter of that of a gasoline-powered vehicle.

South Korean-owned food delivery platform Baemin has started using 10 electric bikes in Ho Chi Minh City, a move it believes will contribute to Vietnam achieving its net zero emissions target by 2050.

Lazada Logistics started using electric bikes for delivery last November, and by the end of April expanded its electric fleet to 100.

Electric cars are also gaining traction.

VinBus, part of Vingroup’s electric vehicle ecosystem, launched the first public bus route using electric vehicles at the end of 2021, and now operates on eight routes in Hanoi.

In March last year it launched its first service in HCMC.

GSM, a company owned by Vingroup chairman Pham Nhat Vuong, became the first all-electric taxi operator in the country in April with 500 cars in Hanoi.

It is now present in HCMC and plans to operate 10,000 taxis nationwide, all made by VinFast, a Vingroup subsidiary.

Last month Hai Phong-based taxi firm En Vang bought 25 VinFast electric cars and leased 125 more from GSM to operate in the coastal city.

In the central highlands province of Lam Dong, taxi firm Lado is also using electric cars.

Electric race

The race to switch to electric vehicles has begun in earnest in Asian countries and territories such as Thailand, Taiwan and Indonesia, where many transport and logistics companies plan to go all-electric by 2035.

In China, the biggest food delivery platform, Meituan, and its competitors are also using electric bikes.

Globally, sales of electric buses and trucks reached an all-time high of 238,00 units last year, up 90% from 2021, according to British research company Interact Analyst.

Concerns about carbon emissions have also persuaded Vietnamese companies to begin making the transition.

Sumit Rathor, general manager of Gojek Vietnam, says the addition of electric bikes is part of parent company GoTo’s commitment to achieve zero emissions, zero waste and zero barriers.

GoTo plans to eventually use only electric vehicles.

The Vietnamese government’s encouraging policy on electric vehicles has also helped speed up the switch.

In July last year the government approved an action program on green energy transformation and reducing carbon and methane emissions by the transportation industry.

The program seeks a complete switch to electric buses by 2025 and electric taxis by 2030.

By 2050 all motorized vehicles will be electric.

Dao Xuan Lai, assistant resident representative and head of UNDP's climate change and environment department in Vietnam, says the transport sector accounts for a quarter of Vietnam's emissions and thus plays, along with construction and industrial production, an important role in helping the country achieve carbon neutrality.

Vietnamese consumers seem to be open to using electric vehicles.

Electric bike sales grew by 10% in 2021, according to data tracking platform Motorcycles Data.

Around 61% of people in Hanoi, Hai Phong, Da Nang, HCMC, and four other localities want to increase the use electric cars, while for electric bikes it is 25%, a survey by the Business Association of High Quality Vietnamese Goods and UNDP Vietnam found.

Electric vehicle manufacturers expect the use of their products by transport companies will help popularize them.

An electric taxi picks up a passenger in Lam Dong Province. Photo by VnExpress/Vien Thong

Bumpy road ahead?

Some analysts say while the potential for electric vehicles in Vietnam is indubitable, there are also obstacles.

Experts at the Electric Power University in Hanoi say that electric two-wheelers have higher potential for adoption than four-wheelers because incomes are low, roads are narrow and there is limited parking space.

Besides, the latter first need a network of charging stations and locations for battery replacement, they point out further.

Le Trung Tin, chairman of the Vietnam Automobile Transportation Association – HCMC, says electric cars take longer to charge than gasoline cars take to fill, and the former cost 1.3-1.5 times the latter.

But electricity costs less than petroleum and is less affected by global prices, he adds.

Some experts have called for incentives from the government to persuade transport companies to go electric.

"There is huge potential for this market. Businesses and the government need to work together to make it a reality," Hoang Trong, an expert with the Business Association of High Quality Vietnamese Goods, says.

Vo Tan Thanh, vice president of the Vietnam Federation of Commerce and Industry, says consumers not only want low prices and high quality but also environmental friendliness.

"Electric vehicles are a global trend, and Vietnam cannot give it a miss."

However, for now high fares can be a barrier to even using electric taxis.

Thu Ha of Hanoi recently paid VND128,000 for a trip from Cau Giay District to Nam Tu Liem District.

She says though she could have paid VND50,000 for the same trip in a normal taxi she wanted to try an electric taxi.

"The electric car was smooth. But with prices more than double, I will have to think twice about using it regularly."