Vietnam sees increasing demand for electric vehicles

While electric vehicle growth is slowing down in Europe, the demand has kept increasing in Vietnam due to contributions from both domestic and imported automobile brands.

Stable socio-economic development with many signs of recovery has turned Vietnam into a potential market for the growth of the automobile industry in general and electric vehicles in particular.  The Vietnam Automobile Manufacturers Association (VAMA) predicts that electric vehicles (EV) in Vietnam will reach 1 million units by 2028, and 3.5 million by 2040.

The market share of electric cars in Vietnam is predicted to reach 15% by 2024, ranking second in Southeast Asia.

The 6Wresearch forecasted that the compound annual growth rate (CAGR) of the electric vehicle market in Vietnam can reach 22.9% during the 2020-2025 periods.

However, the growth of electric vehicle sector in Vietnam still failed to meet expectations.

The domestic consumption of electric vehicles accounted for only 0.7% of the entire Southeast Asian region, figures from Statista in the third quarter of 2022 show.

The car ownership rate in Vietnam is still significantly lower than that of many countries in the region, at 50 cars per 1,000 people. The figure is equivalent to just one-tenth of Thailand and one-twentieth of Malaysia, according to the Ministry of Transport.

This presents an opportunity for automobile companies to invest and develop products in Vietnam.

Meanwhile, Government policies on environmental protection, especially its commitment to net-zero emissions by 2050, will encourage electric vehicle consumption in Vietnam.