Recent reports from local media, including VnExpress, highlight insights shared by Dr. Pham Viet Tuan from the Ho Chi Minh City Institute for Resource and Environment Economics at a workshop titled "Green Transition: What is Needed for Acceleration?" on June 26. He noted that the issue is not a lack of awareness; rather, while there is a willingness to transition, the necessary conditions are not yet in place.
Sevenfold Growth in Four Years: The Reality Created by VinFast
The explosive growth of Vietnam's electric vehicle market is evident in the numbers. Sales of battery electric vehicles (BEVs) surged from 24,038 units in 2022 to over 175,000 units in 2025, marking a 628% increase. During the same period, sales of gasoline and diesel vehicles dropped from 486,217 to 428,943, a decrease of 12%. Market share for electric vehicles skyrocketed from 4.7% in 2022 to approximately 30% in 2025. Overall, the automotive market grew from 510,255 units to 604,042 units, with electric vehicles driving this growth.
VinFast, a Vietnamese company, has played a pivotal role in this market expansion. The sales statistics for BEVs closely align with VinFast's sales figures. The electric taxi and ride-hailing platform GSM, part of the VinGroup ecosystem, has rapidly absorbed electric vehicles, creating significant corporate demand. Notably, the introduction of small electric SUVs priced between 300,000 and 500,000 VND has replaced demand for traditional internal combustion engine hatchbacks and sedans.
Government policies have also supported this trend. Exemptions from registration fees and preferential treatment for excise taxes have significantly lowered the on-road prices of electric vehicles, with these benefits extended until 2030. However, it remains to be seen whether the market can sustain growth once these subsidies end.
Businesses have been quicker to adopt electric vehicles than individual consumers. A notable example is the electric vehicle ride-hailing platform GSM. According to market research firm Mordor Intelligence, GSM, which operates exclusively with VinFast vehicles, has risen to compete with Grab in terms of gross merchandise value since its market entry.
On April 16, Lavi Taxi, a Vietnamese taxi company, announced a partnership with VinFast and GSM to convert its entire fleet of 2,000 vehicles, including MiniO Green, Helio Green, VF5, Limo Green, and EC Van, to electric. The plan includes a phased rollout in four cities: Ho Chi Minh City, Can Tho, Khanh Hoa, and Da Nang, replacing existing fossil fuel vehicles. An integrated operational ecosystem combining V-Green's charging infrastructure and specialized service workshops is also being developed.
Reactions from the public regarding the transition to electric vehicles have been mixed, with both optimism and caution expressed. Comments on articles reveal experiences such as, "I switched to an electric vehicle two years ago, and it's economical and convenient," and, "Once I tried it, I didn't want to go back to gasoline cars; a 150 km trip was no problem." However, long-distance users and residents in areas with limited charging infrastructure remain hesitant.
Some users believe concerns about the lack of charging stations are exaggerated. One user stated, "Many people think electric vehicles are inconvenient due to a lack of charging stations, but in reality, the infrastructure is changing very quickly," noting the increasing number of charging points at shopping malls, apartments, parking lots, and highways. Others pointed out that battery swap stations are available, allowing for quick battery changes without waiting for charging. Another user remarked that finding charging stations in urban areas and along highways has become easier in recent years, and charging costs have decreased, making daily use more convenient.
Transforming Ho Chi Minh City Requires Unimaginable Funding: Three Major Barriers
Despite the numerical growth, the fundamental conditions for a successful transition are still lacking. Dr. Pham Viet Tuan estimates that converting all vehicles in Ho Chi Minh City to electric would require approximately 46,000 MW of power. Upgrading the power grid and substations alone would cost at least $7 billion, and including charging stations, vehicles, and support policies, total capital needs could exceed $10 billion. Legal gaps also pose a significant issue; Vietnam currently lacks comprehensive legislation governing electric vehicles. There are no clear regulations regarding liability in cases of battery fires or explosions, leaving consumers without adequate protection.
Power supply pressures are another practical variable in the transition. The Electricity of Vietnam (EVN) recently reported that the country's power demand is rising rapidly, with daily consumption exceeding 10 billion kWh during heatwaves. The power sector is expanding low-emission sources such as hydropower, wind, and solar, while also considering offshore wind and nuclear power in the long term. However, modernization of the power grid and efficient power use must go hand in hand.
The issue of skilled labor presents a more structural challenge. Associate Professor Nguyen Dinh To pointed out that Vietnam's green economy currently accounts for only 4-4.5%, with youth unemployment rates between 9-10% and the informal labor force comprising 64.5%. Even with significant investment in infrastructure and technology, the lack of skilled personnel to operate these systems could hinder effectiveness.
* This article has been translated by AI.
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