Vietnam’s EV boom: Can the charging network keep pace?

Vietnam is undergoing an EV revolution that has never been seen before. Early in 2024, sales jumped by more than 400% due to growing consumer demand and VinFast’s supremacy in the local market. However, the nation’s severely inadequate charging infrastructure presents a serious problem as EVs proliferate on the roadways. Is Vietnam’s infrastructure scalable enough to accommodate this expansion?

The arguments

The Chicken-and-Egg Problem

The challenge in Vietnam is well-known: without a strong infrastructure for charging EVs, individuals are reluctant to purchase them, yet businesses don’t want to spend money on chargers if there aren’t enough EV customers. This stalemate could slow the industry’s growth.

Not Enough Creative Solutions

Promising initiatives that provide people a chance to benefit from the EV surge include V-Green. Significant obstacles, however, are presented by competition, expensive upfront expenses, and a lack of government subsidies. Franchisees may have to wait years to turn a profit, and serving rural areas can be particularly challenging.

Inaction of the Government

Vietnam’s success is mostly driven by private enterprises like VinFast and SolarEV, in contrast to other nations where governments take the lead in building EV infrastructure. Experts contend that the infrastructure gap may continue if the government does not step in and provide incentives, land distribution, or subsidies.

Global EV Giants Struggle in Vietnam

International firms like BYD point to a lack of land, ambiguous laws, and poor infrastructure as reasons for their inability to grow in Vietnam. This might hinder innovation and competitiveness, which would delay the nation’s EV progress.

The facts

Counterpoint Research reports that in the first quarter of 2024, sales of electric vehicles in Vietnam increased by 400%. The market is dominated by domestic automaker VinFast.

Rural areas are underserved by VinFast’s 150,000 charging stations, which are mostly located in urban areas.

According to HSBC Bank, infrastructure investment in Vietnam is anticipated to be $12 billion in order to achieve widespread EV adoption.

Innovative initiatives such as VinFast’s V-Green concept are encouraging private property owners to install chargers. Already, thousands of franchise applications have been filed.

Franchisees who install chargers on-site claim a 40% rise in sales, such as Nguyen Thi Phuong Dung, the proprietor of a cafe.