In late August, the Vietnamese automotive manufacturer VinFast announced its partnership with Chinese company Gotion High-Tech to produce batteries for electric vehicles. The collaboration, as per the Vietnam News Agency, would help advance the growth of the EV market in Vietnam.
This partnership is a big step forward for the awareness and acceptance of electromobility within Vietnam. Bloomberg estimates that the number of electric vehicles worldwide is expected to grow to 90 million by 2030—and in Asia, one of the world’s largest automotive markets, expansion into the Southeast Asian market is crucial. But while other countries like Indonesia and Thailand have embraced EVs, the reluctance and inability of both the Vietnamese government and its people to transition to EVs have led private companies and start-ups to promote hyperlocal solutions.
Vietnam’s Current Automotive Landscape
According to YCP Solidiance research featured in the 2022 AutoCare Factbook, the number of motorbikes in Vietnam outnumbered passenger vehicles by a staggering ratio of 30 to 1 in 2020. The country has an active passenger vehicle population of only two million cars, one of the lowest in Southeast Asia.
However, the passenger vehicle market within the country is growing at a rate of 18.3% year-over-year from 2015 to 2019. More middle-class families have begun purchasing vehicles, and the popularity of ride-sharing fleets have increased the number of vehicles on urban roads.
Nevertheless, the growing demand for passenger vehicles amidst the prevalence of gas-powered motorbikes on the roads is only highlighting a large problem within the country’s urban centers: pollution. Data from IQAir puts Vietnam as the 15th most polluted country in the world. Along with poor road conditions and outdated urban planning, Vietnam’s cities are facing a transport crisis that has led to high levels of polluted air and heavy traffic. To combat this, cities like Hanoi and Ho Chi Minh have put forth regulations to gradually restrict motorbikes on city streets by 2030—making it much more urgent for electromobility to be accepted and adopted within the country.
Local Solutions for EV Awareness
While VinFast is working on making EV acceptance and awareness mainstream in Vietnam through the launch of their first electric automobile this 2021, the company is also working on a more local solution: electric motorbikes. In September 2020, Bloomberg reported that the company had branched into developing e-scooters for Vietnam’s motorbike-reliant population, focusing on the cities of Hanoi and Ho Chi Minh. To encourage usage, the company is also aiming to increase the number of charging stations within the country from 2,000 to almost 50,000.
Start-ups are also working hard to promote electric motorbikes as the initial foray into EVs for the country’s citizens. Dat Bike, which is focused on developing electric motorbikes, recently raised USD 2.6 million in pre-Series A funding. The start-up wants to create motorbikes that are low-cost, locally made, and at par or even surpass the performance of gas-powered bikes.
Those wanting to invest in electromobility now have a unique opportunity to incorporate tech-driven and digital solutions that cater towards the specific needs of Vietnam’s residents through AI, blockchain, and even solar energy. However, these efforts will be for naught unless proper regulation for electric vehicles is passed in Vietnam. The support of the national government will be essential in encouraging the public to transition towards EVs.
Subscribe to our newsletter here for more insights from across Southeast Asia.