Vietnam is set to experience significant growth in electric vehicle (EV) adoption, with an expected increase from 2.9% in 2022 to 13.6% in 2023, according to a report by BMI Research. While EVs currently hold a small share of the Passenger Car Market in Vietnam, the research company predicts a strong surge in 2023.

This growth can be attributed to the increased production and delivery of VinFast vehicles, a local EV manufacturer. VinFast’s expansion throughout 2023, along with the availability of affordable China-made EVs, are expected to drive the growth of the EV market in Vietnam.

BMI Research estimates that passenger EV sales in Vietnam will expand by 114.8% in 2023, reaching around 18,000 units. Battery electric vehicle (BEV) sales could surge by 104.4% compared to the previous year, while plug-in hybrid vehicle (PHEV) sales may increase nine-fold year-over-year.

The Vietnam Automobile Manufacturers Association predicts that the country will have 1 million EVs by 2028 and 3.5 million units by 2040. Currently, EVs make up only a small fraction of the passenger car market in Vietnam, with sales of about 284,000 passenger cars in 2022, of which only a few thousand were electric.

Despite the expected growth, there are challenges to EV adoption in Vietnam. Low incomes and a lack of incentives are factors that may hinder adoption. However, the battery leasing business model, allowing consumers to rent batteries when purchasing new EVs, could help reduce expenses and attract taxi fleet operators.

Another challenge is the current charging infrastructure, primarily suitable for two-wheelers. To address this, more players are expected to enter the market and expand the EV charging network in Vietnam. Companies like EBOOST and Foxconn are pledging to invest in charging infrastructure to facilitate the rapid expansion of the local and regional EV charging networks.

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