Investing In Vietnam's Electric Vehicle Market

Russin & Vecchi


Russin & Vecchi was founded in Asia over 60 years ago. We have offices in Ho Chi Minh City and Hanoi. We work with global clients and with international law firms. From entry strategy to operations, we help clients navigate the complex and changing Vietnamese regulatory framework. We deliver creative, compliant, and practical solutions.
Vietnam has a population of 100 million. General car ownership stands at 1/43 people, significantly lower than neighboring markets.
Vietnam Energy and Natural Resources
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Vietnam has a population of 100 million. General car ownership stands at 1/43 people, significantly lower than neighboring markets: Thailand:1/10 and Malaysia:1/20.1 Vietnam's car demand in 2025 is forecast to be 800,000 - 900,000 new vehicles and 1.5 - 1.8 million by 2030.

At the same time, interest in electric vehicles (EVs) is growing. Mr. Nguyen Anh Duc, Director of the Vietnam Petroleum Institute (VPI), observed that at the moment 33% of Vietnamese consumers want to purchase an EV.2 The Vietnam Automobile Manufacturers Association (VAMA) forecasts that Vietnam will have one million EVs by 2028, and 3.5 million by 2040.

These data suggest great potential for EV market expansion. Additionally, with its strategic position within Southeast Asia, Vietnam has the potential to become an exporter of EVs.

Do EVs really reduce pollution?

Greenhouse gas (GHG) emissions from vehicles are the total emission of gas released directly from the exhaust pipe of a vehicle when it burns fuel (tailpipe emission), and gas released from the production, refining, and transportation of the fuel (fuel production emissions), as well as gas released from manufacturing, operating, and disposal of the vehicle itself (vehicle lifecycle emissions).

Tailpipe emission

EVs don't rely on internal combustion engines like traditional fossil fuel vehicles. They operate on an electric motor, which is driven by rechargeable batteries. Therefore, EVs produce zero tailpipe emissions.

Fuel production emissions

EVs may not emitGHGfrom their tailpipes, but emissions are created in the process of building and charging them. One source of emissions is thecreation of lithium-ion batteries for EVs. The process of mining and heating minerals such as lithium, cobalt, and nickel used in the batteries, still requires using fossil fuels. As a result, building the 80 kWh lithium-ion battery found in a Tesla Model 3 creates between 2.5 and 16 metric tons of CO2.3 This intensive battery manufacturing means that building a new EV can produce around 80% more emissions than building a comparable gas-powered car.4

Vehicle lifecycle emissions

However, the major source of EV emissions is the energy used to charge their batteries.Where the energy is from renewable sources, EVs will inherit a minuscule carbon footprint. In countries that get most of their energy from burning dirty coal, the emissions numbers for EVs will be larger but comparatively quite good. On average, a gasoline car emits more than 350 grams of CO2per mile driven over its lifetime, while a battery-electric vehicle creates just 200 grams.5

According to the National Renewable Energy Laboratory (NREL) and Idaho National Laboratory reports onthe average cost of charging electric vehicles in the United States, driving an EV instead of a conventional vehicle can save a driver as much as US$1,000 per year. Additionally, inresearch conducted by Argonne National Laboratory (ANL) on light-duty plug-in electric vehicles in the United States, electricity generated to operate an all-electric vehicle produces 53% less emissions than the tailpipe emissions from gasoline vehicles.6

In the future, if more electricity utilized to charge EVs can be produced from renewable energy sources, then the entire cycle, charging and operating, will be greener and cleaner.

Investment Sectors

Investors in the EV market have a wide range of choices, each presenting unique growth opportunities.

EV Manufacturing

Globally, at this writing, there are more than 100 electric car manufacturers. Some, Tesla, GM, Volkswagen, Ford, Daimler, Toyota, and Nissan are well-established vehicle manufacturers.

Vinfast is the only electric car manufacturer in Vietnam. However, given the growing demand and diverse preferences within the car market, more electric car manufacturers may consider stepping in. There are many untapped opportunities for investment in the electric car market that have yet to be explored.

Motorbikes are different. Many brands are available in the market. These include local players such as VinFast, Datbike, and Pega, alongside foreign brands like Yadea, Dibao, and MBigo.


Another opportunity lies in manufacturing batteries for EVs. There are various types such as lithium-ion, nickel-metal hydride, and lithium-sulfur batteries, depending on the vehicle's design and intended use.

Battery end-of-life management presents a market worth exploring. Improper disposal of EV batteries can lead to environmental contamination. Effective recycling processes are crucial to recover valuable materials, reduce the need for new raw materials extraction, and minimize environmental impact.

Additionally, there is a need to adopt advanced battery technologies. Research and development efforts will be important.

Charging Stations

Charging infrastructure is key. Widespread public charging stations, home charging stations, and workplace charging solutions are all parts of this infrastructure.

Currently, VinFast has installed charging stations in 63 provinces and cities, 125 national and provincial highways, with 150,000 charging ports with diverse capacities up to 360 kW.

Mr. Pham Nhat Vuong, Chairman of Vingroup, announced the establishment of V-GREEN Global Charging Station Development Company to invest an additional VND 10,000 billion to build, upgrade and complete the existing VinFast charging station system. This would make Vietnam one of the countries with the largest density of electric vehicle charging stations in the world.

There will be a huge demand for wireless charging technologies, Vehicle-to-Grid (V2G) and Vehicle-to-Home (V2H) technologies, and Telematics and Fleet Management Solutions. All of this will follow the market.

Further, solar-powered electric vehicle charging stations will have a positive impact on both the electric vehicle industry and the energy sector. Developing charging stations contributes to promoting the demand for electric vehicles.


Market growth will be accompanied by the demand for training programs for technicians specializing in EVs. EV maintenance and repair, safety protocols, certification, ongoing education, and hybrid vehicle training are an integral part of this need.

Educational institutions can also form partnerships with manufacturers to develop more advanced technologies in this field.

Addressing the transition from gasoline cars

What about the gasoline vehicles that are being replaced? Several scenarios apply: resale and secondhand market, scrappage programs, disposal, and recycling, or modification to EVs and hybrids.

Government's Direction

The Law on Environmental Protection and the accompanying Decree 08/2022/ND-CP, which relate to the protection of the environment in transportation activities, encourage the development of public transportation, vehicles that use renewable energy, low fuel consumption, and low or no emissions. All of this aims to reduce and eliminate vehicles that use fossil fuels and pollute the environment.7

The government has made clear that Vietnam will reduce GHG emissions and will assign specific targets to different sectors, particularly: "37.5 million tons of CO2 equivalent in transportation will be cut from now to 2030".8

Since EVs don't emit tailpipe emissions, they reduce air pollution by reducing GHG emissions. Even when fossil fuels are needed to power EVs, they are less polluting than a typical gas-powered vehicle. As electric vehicles become more popular and the electricity is more and more generated from clean sources, the potential to reduce emissions will increase.9

In July 2022, the Prime Minister approved Decision 876/QD-TTg on the "Action Program for Transition to Green Energy and Mitigation of Carbon Dioxide and Methane Emissions from Transportation".10 The Decision sets out important milestones to convert the consumption of gasoline-powered vehicles to EVs. That is, between now and 2040, Vietnam will continue to make the transition to EVs. It intends to use green energy for new and existing bus stations. By 2040, Vietnam intends to phase out manufacturing and importing fossil fuel-powered automobiles and motorcycles for domestic use; and by 2050, Vietnam will use electricity and green energy for 100% of heavy vehicles.

To achieve these milestones, the government commits to implement key strategies across multiple fronts, including infrastructure development, incentives and policies, investment in research and development, public awareness and education, collaboration and partnerships.

Related Benefits

Decision 876/QD-TTg encourages investors to explore numerous opportunities in many sectors related to Vietnam's transition to EVs.

Vietnam has implemented policies to reduce EV ownership costs. Registration fees for buses using clean energy have been removed. Development of environmentally friendly public passenger transport is being promoted. The special consumption tax has been dramatically reduced from 5-15% to 1-3%.

Vehicle registration fees for battery-powered electric cars registered for the first time between March 1, 2022 and February 28, 2025, has been reduced to zero.11

Further, the Special Consumption Tax (SCT) on the sale of electric cars is now lower than the rate on combustion engine cars of the same capacity. Specifically, the SCT rate for cars with internal combustion engines ranges from 15 to 150% depending on the vehicle model and cylinder capacity, whereas the SCT rate for electric cars has been reduced to 1 – 3% (between March 1, 2022 – February 28, 2027) and 4 – 11% (from March 1, 2027). 12

What is still missing?

Vietnam, however, still lacks any comprehensive set of regulations on the trading, manufacturing, and distribution of EVs. These regulations would set out national standards for commercial, safety, and technical aspects.

To speculate how regulations will develop, one can look at neighboring countries with more advanced legal frameworks.

Australia is perhaps the most advanced neighbor. Australia provides financial and non-financial incentives. Financial incentives include subsidies, interest-free loans, exemptions from registration, exemption from stamp duties, discounted parking for both private and commercial EVs, toll lane exemptions, and complimentary charging. There are luxury car tax exemptions for EVs, and more. Non-financial incentives include access to high-occupancy vehicle (HOV) lanes, allowing EV drivers to bypass traffic congestion during peak hours.

Australia will adopt Euro 6 and Euro 7 fuel standards to mitigate vehicle emissions. For example, Euro 6 is a comprehensive set of emissions standards introduced by the European Union (EU) to set acceptable levels of pollutants emitted by vehicles equipped with internal combustion engines, such as cars, vans, trucks, and buses.

Other countries with well-established regulations that govern EVs include China, Japan, and South Korea. Their regulations address safety, performance, and EV emissions standards. All of this contributes to the overall development of the EV market. Vietnam does not have such a framework yet, but it seems to be under consideration.


The future of gasoline cars in Vietnam hinges on market demand, government policies, technological advances, and environmental considerations. But one certainty is that in whatever direction and at whatever pace the industry grows, Vietnam's automotive industry will experience significant changes.

The shift towards electric vehicles (EVs) is rapid. From the perspective of GHG emission reduction, EVs are not a perfect solution that can eliminate transportation-related pollution, but they deal with a large part of it. As we aim for net-zero GHG emissions by 2050, the opportunities for investors in the EV market are boundless.

The coming transformation isn't just about cars; it affects the whole industry. It encompasses EV manufacturing, battery production, charging infrastructure, technical training, and much more. Vietnam is on the cusp of this new era.


1 Vietnam Petroleum Institute's (VPI) signpost for domestic electric cars market in Vietnam <>.

2 Frost & Sullivan's survey (US).

3 Erik Emilsson and Lisbeth Dahllöf. "Lithium-ion vehicle battery production: Status 2019 on energy use,CO2emissions, use of metals, products environmental footprint, and recycling." IVL Swedish Environmental Research Institute, in cooperation with the Swedish Energy Agency, Report C444, November 2019.

Hans Eric Melin. "Analysis of the climate impact of lithium-ion batteries and how to measure it." Circular Energy Storage Research and Consulting, July 2019. Commissioned by the European Federation for Transport and Environment.

Dale Hall and Nic Lutsey. "Effects of battery manufacturing on electric vehicle life-cycle greenhouse gas emissions." The International Council on Clean Transportation, February 2018.

4 This estimate comes from Argonne National Laboratory'sGREET(Greenhouse gases, Regulated Emissions, and Energy use in Technologies) Model, sponsored by the U.S. Department of Energy. (

5 MIT Energy Initiative:Insights Into Future Mobility, November 2019.

6 David Gohlke and Yan Zhou, Assessment of Light-Duty Plug-In Electric Vehicles in the United States, 2010–2018, Argonne National Laboratory (March 2019) <>.

7 Law on Environmental Protection, article 65.7 and Decree 08/2022/ND-CP, article 75.

8 Decree No. 06/2022/NĐ-CP dated January 7, 2022.

9 Li, Z.; Khajepour, A.; Song, J. A comprehensive review of the key technologies for pure electric vehicles. Energy 2019, 182, 824–839.

10 Decision 876/QD-TTg.

11 Decree No. 10/2022/ND-CP.

12 Law on Special Consumption Tax and Law No. 03/2022/QH15 amending and supplementing several articles of the Law on SCT.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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