Vietnam’s electric vehicle (EV) market is experiencing an unprecedented surge, driven by a national push towards green transportation and a roadmap to phase out petrol-powered vehicles in major urban centers like Hanoi and Ho Chi Minh City. This burgeoning sector has become a battleground for both domestic and international manufacturers, each vying for a slice of a market projected to reach US$6.7 billion by 2030, with an annual growth rate of 18%, according to forecasts by RMIT. As the country transitions to sustainable mobility, the competition is not just about producing vehicles but also about building infrastructure, securing supply chains, and navigating a complex policy landscape.
A National Push for Green Transport
Vietnam’s commitment to reducing carbon emissions and curbing urban pollution has set the stage for a dramatic transformation in its transportation sector. The government’s strategy to restrict petrol-powered vehicles in key cities like Hanoi and Ho Chi Minh City is a clear signal of intent. Local authorities in Hanoi, Da Nang, and Ho Chi Minh City are actively supporting the EV ecosystem by offering incentives such as land lease fee exemptions for charging station development and strategic location planning. These measures are designed to accelerate the adoption of EVs, addressing both environmental concerns and the growing demand for cleaner alternatives in densely populated urban areas.
This policy framework has created fertile ground for investment. The Vietnamese EV market is no longer a niche segment but a dynamic arena where innovation and competition are thriving. Both domestic companies and global giants are recognizing the potential, pouring resources into production, infrastructure, and localized supply chains to gain a foothold in this promising landscape. 
Domestic Players Step Up Their Game
Vietnam’s homegrown manufacturers are at the forefront of this green revolution, leveraging local knowledge and government support to expand their market share. VinFast, the country’s leading EV manufacturer, has ambitious plans to scale up its production capacity to 1 million electric motorbikes annually. Beyond motorbikes, VinFast is diversifying into new segments such as mini electric cars and electric trucks, positioning itself as a comprehensive player in the sustainable transport space.
Other domestic firms are also making significant strides. Dat Bike, a Ho Chi Minh City-based startup, is planning to triple the scale of its factory while expanding its reach into the southwestern region. The company is innovating with mobile maintenance and warranty services, a model that resonates well with local consumers who value convenience and accessibility. Meanwhile, manufacturers like Yadea, Selex, and Pega are contributing to a combined domestic production capacity of 1.8 million units per year, a figure that aligns closely with the rising demand for EVs across the country.
These companies are not merely responding to market trends; they are shaping them. By focusing on affordability, localized production, and customer-centric services, Vietnam’s domestic EV players are building a strong foundation to compete with international entrants.
Foreign Giants Eye Vietnam’s Potential
The allure of Vietnam’s EV market extends far beyond its borders, attracting major international corporations eager to capitalize on the country’s green transition. LG Energy Solution, a leading battery manufacturer from South Korea, recently announced plans to invest in an electric motorbike factory and charging station infrastructure in Phu Tho province. This investment, supported through official development assistance, signals confidence in Vietnam’s potential as a hub for green energy and transport innovation.
China’s BYD, the world’s largest EV manufacturer, is reportedly exploring the possibility of establishing a plant in Vietnam, while South Korea’s Hyundai is deepening its supply chain presence in the country. High-end brands such as Mercedes-Benz, BMW, Audi, and Porsche are also entering the fray, introducing premium EV models aimed at Vietnam’s growing segment of high-income earners. Even traditional motorbike manufacturers like Honda and Yamaha, with long-established presences in Vietnam, are rolling out electric models, potentially sparking a broader wave of adoption among other foreign brands like Piaggio, Suzuki, and SYM.
What sets these foreign investments apart is their focus on localization. Many companies are not just importing finished products but are working to increase the proportion of locally made components. This approach not only reduces costs but also aligns with Vietnam’s broader economic goals of fostering industrial growth and job creation. The long-term vision of these firms underscores Vietnam’s emerging role as a regional hub for EV production.
Challenges in the Race for Market Share
Despite the optimism surrounding Vietnam’s EV boom, significant challenges remain. The market is entering a critical transition phase where success hinges on more than just production capacity. Experts emphasize that comprehensive preparation—spanning product development, after-sales services, maintenance networks, and charging infrastructure—is essential for companies to thrive in this competitive space.
One pressing issue is the lack of standardized technical regulations for batteries and charging stations. Without common standards, interoperability between different brands and systems could become a barrier to widespread adoption. Additionally, experts are calling for the introduction of green credit policies and incentives, such as subsidized electricity prices for charging, to make EVs more accessible to the average consumer. Addressing these gaps will require close collaboration between the government, industry stakeholders, and local authorities.
Infrastructure development is another hurdle. While cities like Hanoi and Ho Chi Minh City are taking steps to support charging station rollout, the scale and pace of deployment must keep up with the growing number of EVs on the road. Without a robust network of charging points, consumer confidence in EVs as a practical alternative to traditional vehicles could wane.
A Broader Transformation
The rise of Vietnam’s EV market is emblematic of a broader shift towards sustainability in Southeast Asia. As one of the region’s fastest-growing economies, Vietnam is positioning itself as a leader in green transportation, a move that could inspire similar transitions in neighboring countries. The involvement of both domestic startups and global conglomerates highlights the universal appeal of this sector, where technology, policy, and consumer behavior intersect.
For domestic manufacturers like VinFast and Dat Bike, the challenge is to maintain their early-mover advantage while scaling operations to meet demand. For foreign players, the focus is on adapting to local conditions—whether through partnerships, localized production, or tailored marketing strategies. The outcome of this race will depend on which companies can best navigate the complexities of Vietnam’s market, from regulatory frameworks to cultural preferences.
Economic and Environmental Implications
The economic implications of Vietnam’s EV boom are profound. The projected growth to a US$6.7 billion market by 2030 represents not just a commercial opportunity but also a chance to reshape the country’s industrial landscape. The influx of foreign investment, coupled with the expansion of domestic production, could create thousands of jobs and bolster Vietnam’s reputation as a manufacturing hub. Moreover, the emphasis on locally made components aligns with national goals of reducing reliance on imported goods and strengthening economic self-sufficiency.
Environmentally, the shift to EVs promises significant benefits. Urban centers like Hanoi and Ho Chi Minh City, long plagued by air pollution from petrol-powered motorbikes and cars, stand to gain from reduced emissions. If successful, Vietnam’s green transport policies could serve as a model for other developing nations grappling with similar challenges. However, the environmental impact will depend on how the country sources its electricity—transitioning to renewable energy for charging infrastructure will be critical to maximizing the benefits of EVs.
Looking Ahead
As Vietnam’s electric vehicle market accelerates, the stakes for both domestic and foreign players are higher than ever. The government’s vision of a greener future is clear, but realizing it will require sustained investment, policy innovation, and industry collaboration. For now, the race for dominance in this promising sector is wide open, with technology, infrastructure, and consumer trust as the ultimate prizes.
The question remains: can Vietnam balance rapid growth with the structural challenges of a nascent industry? As manufacturers rev up their efforts and policymakers refine their strategies, the road ahead for the country’s EV market is both electric and uncertain.
