I. Overview of the Vietnam EV market in the first 6 months of 2023 – Electric car consumption is a bright spot before the general decline of the whole industry
1. Sales volume of the Vietnam auto market declines in the first half of 2023
Domestic car consumption in the first half of 2023 is experiencing a decline, although deep discounting policies to stimulate demand for the auto market have been deployed by car manufacturers.
According to VIRAC, in the first six months of 2023, Vietnam spent 1.6 billion USD importing cars, with the number of nearly 70,000 units of all kinds, up 5% over the same period in 2022 (63,731 vehicles). Although the number of cars imported to Vietnam in 6 months increased by 5% over the same period last year, domestic car consumption decreased sharply compared to 2022.
According to VIRAC, total auto sales by the end of July 2023 decreased by 30% compared to 2022. Passenger cars decreased by 34%; commercial vehicles down 13%; specialized vehicles decreased by 63% compared to 2022.
2. The situation of Vietnam EV market consumption receives positive growth signals
As we all know, electric cars are vehicles that do not emit pollutants into the air with high energy efficiency, users can easily integrate modern driver assistance features, self-driving. . With that advantage, this is a car that is highly appreciated and recommended for use around the world. Therefore, at present, the world EV market has made leaps and bounds.
The recent CES 2023 (USA) event witnessed the massive entry of the auto giants, signaling that the EV market will break through sales in 2023.
In particular, Nikkei Asia believes that 2023 will be the year of the take-off of the Southeast Asian EV market when different manufacturers begin to offer more options at more reasonable prices to conquer consumers. in emerging economies.
Indeed, in Vietnam, while the consumption of the domestic auto industry is decreasing, the consumption of the EV market is receiving positive signals. The Vietnam Automobile Manufacturers Association (VAMA) also forecast that Vietnam will reach one million electric cars by 2028 and by 2040 the number of vehicles will fall to 3.5 million.
Proof for Vinfast – a pure Vietnamese EV manufacturer. At this time, in the EV segment, with 1,181 units sold, VF e34 is the model with the largest contribution to the company’s overall sales in July. Meanwhile, the A-class model – VF 5 Plus – continued to attract customers when it sold 1,000 units, nearly doubled compared to the previous month. The luxury full-size SUV VF 9 is also on a slight increase compared to June, with 418 units sold.
Besides, accumulated by the end of July 2023, there were 6,253 VinFast VF e34 cars and 4,998 VF 8 cars delivered to customers. Although only being handed over from March and April this year, the two models VF 9 and VF 5 Plus have achieved positive cumulative sales of 1,452 VF 9 and 1,977 VF 5 Plus, respectively.
So in total, VinFast has handed over 14,680 electric cars to customers in Vietnam in the first 7 months of this year. This is an impressive result of VinFast in the context of a quiet market, people tend to tighten their spending, causing a sharp drop in car consumption.
Not to mention, at the end of April 2023, Vinfast launched the SM Green taxi company with 2 lines of cars: GreenCar – standard taxi (VF e34) and LuxuryCar – high-class taxi (VF 8) making demand for 2 lines. This car has grown tremendously. This is also the basis for the growth potential of EV market consumption in Vietnam in the future.
The reason is explained by the Vietnamese market with a population of nearly 100 million people, the car ownership rate is still low in the region. However, in recent years, when GDP has grown steadily, the middle class is starting to increase strongly, the speed of technology development is fast, which is one of the signals that Vietnam is becoming a market. Electric cars have a lot of potential.
Therefore, besides VinFast electric cars, which are familiar to Vietnamese customers, many major car manufacturers have planned and launched EV models in the Vietnamese market such as Kia, Hyundai, Audi…
3. Vietnam EV market players start to accelerate in the race to produce electric cars
In the past time, besides the domestic electric car brand VinFast, many big companies have planned to participate in the Vietnamese EV market such as: KIA introduced the EV6 model, Audi launched the e-tron T, Hyundai launched the EV6 model. IONIQ 5. At Vietnam Motor Show 2022, many electric car models appeared for the first time as a market exploration move by manufacturers, such as Lexus with LF-Z, Mercedes EQS with EQS 450+ and EQS 580 4MATIC, Toyota with bZ4X…
Some companies such as Mitsubishi and Porsche have also begun to deploy charging stations as a premise for distribution in the Vietnamese EV market. In addition, Skoda Auto, the Czech car brand, has signed a cooperation agreement with TC Motor from 2023 to distribute some electric vehicles and start assembly from 2024. Notably, recently, TMT Motors has officially launched the Wuling HongGuang MiniEV electric car – the opening product of the mini EV market segment in Vietnam.
Even ancillary businesses such as EVone, ZenCar, Autel… have also seized the opportunity to catch up by providing solutions for rechargeable batteries to catch up with the wave of green migration.
Among many EV market brands currently distributed in Vietnam, VinFast is still the leading brand. In 2023, after “death” of all car models with internal combustion engines, VinFast has become a 100% EV market company, becoming one of the pioneer car manufacturers in the world to stop producing cars. gasoline to switch to pure electric vehicle production.
Currently, Vinfast’s electric cars account for more than 50% of the domestic EV market share. In addition to distribution in the domestic market, Vinfast is also starting to approach the world’s largest auto market, the US, and has achieved positive initial results.
Last April, SM Xanh taxi launched a pure electric taxi service in Vietnam with VinFast models. According to the evaluation of many users, SM Green taxi fares are more optimal both in terms of opening price and next route compared to traditional taxi services. Meanwhile, the green SM taxis deployed in the early stages including VinFast VF e34 and VF 8 are all good quality models and are in a higher segment than traditional service petrol cars at present.
A positive signal for Vietnam’s EV market, from July 1 to the end of 2023, domestically assembled cars will enjoy a policy of 50% reduction in registration fees for the first time. As a result, brands such as Mazda, VinFast, Hyundai, Kia, Peugeot, Toyota… are the ones that benefit the most when most of the product portfolio sold in Vietnam is manufactured and assembled here.
Therefore, this is a great opportunity for foreign car manufacturers to start planning the assembly and production of vehicles, especially EV market, in Vietnam – an extremely large car consumption market. future potential.
II. Exceptional prospects of Vietnam EV market in the short and long term
1. Impact from the Government to stimulate demand – increase consumption for Vietnam EV market
In the context of the decline of the domestic automobile market, many supportive policies of the Government such as free registration, reduction of consumption tax from 15% to 3% … have been applied, acting as a corridor. leading the way to the EV market. The Vietnamese EV market in 2023 is very open in terms of opportunities, but will also be very challenging because of increasing competition.
At the present time, in order to increase the purchasing power of domestic cars and promote the growth of industrial production, the Government has issued a policy to stimulate demand by reducing excise tax and registration fees for car models. domestically produced gasoline and electric cars.
A representative of the Department of Industry said that the Ministry of Industry and Trade will also join hands to research and advise on policies to support consumers as well as organizations that are researching and developing EV market infrastructure systems. Thereby contributing to boosting the consumption demand of the EV market in the coming time.
2. Forecast of Vietnam EV market in Vietnam in the second half of 2023
According to a report by the International Energy Agency (IEA) released on April 26, sales of electric cars (EVs) are growing strongly and are expected to account for nearly 20% of vehicle sales in 2023. CNBC quoted a report by BMI Research, a market data research unit of Fitch Solutions, showing that in 2023, EV market sales in the Vietnamese market are expected to increase by 114.8 percent year-on-year. last year, increased to 18,000 units.
Besides, with the continuous appearance of new EV models, the mini EV market in Vietnam is very hot, promising to have very fierce competition in the second half of 2023. Especially with The appearance of the mini EV segment will probably be the name that “occupies” the Vietnamese market from now until the end of the year and this wave of mini cars will continue to accelerate in 2024.
The above forecasts are completely grounded by positive signals from the results at the end of July 2023. EV market’s consumption in Vietnam has rebounded after many consecutive months of decline thanks to strong promotional efforts by businesses and the Government’s policy of 50% reduction in registration fees.
Commenting on the Vietnamese EV market in the coming time, many experts believe that the market will continue to grow in the last months of the year because this is the first month of applying the policy of 50% reduction in registration fees for manufactured cars. domestic production and assembly, which is also the type of car that will sell better than imported cars.
3. Vision of Vietnam’s EV market in the long term
According to the EV market sales roadmap released by analysts, by 2030, electric cars will account for 60% of the global auto market share in order to achieve the goal of zero carbon emissions by 2050.
At this time, when measures to tighten emissions protect the environment and strengthen policies to stimulate the market, along with technological advancements like a storm, the prospect of electric cars covers the streets of Vietnam. South and the world will become reality sooner than anticipated. Currently, most developed countries are self-sufficient in technology, possessing brands with great competitive potential, typically giants in the world EV market such as Tesla of the US, SAIC of China or Nissan Leaf of Japan.
As for Vietnam, BMI predicts that electric vehicle sales in Vietnam will grow by an average of 25.8% between 2023 and 2032. Notably, BMI estimates the penetration rate of cars. electricity (meaning the share of EV market sales to total car sales) will increase to 13.6% by 2030.
Similarly, the Vietnam Automobile Manufacturers Association also predicts that total EV market ownership will reach 1 million people in 2028 and 3.5 million people in 2040.
Information on Vietnam’s EV market is compiled from the “Report on Vietnam EV market in Q2/2023” conducted by VIRAC. The report provides full information on the macroeconomics, trade supply and demand of the automobile industry, EV market, relevant information and forecasts from the latest updated data.
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