How electric vehicles can shape the auto industry

Dec 23rd at 08:29
23-12-2022 08:29:26+07:00

How electric vehicles can shape the auto industry

In order to implement Vietnam’s net-zero commitments, one of the solutions by the government is to use more electric vehicles (EVs) as a means of transportation for the step-by-step replacement of motor vehicles powered by conventional internal combustion engines.

To help achieve such targets, in January the National Assembly passed a law to ensure special consumption tax (SCT) rates are greatly decreased to encourage people to use EVs (Table 1) for their means of transportation. At the same time, the ownership-transferring fee rates for such vehicles are noticeably decreased as well (Table 2).

In July, the prime minister promulgated Decision No.876/QD-TTg on approving the action program for transition to green energy and mitigation of carbon dioxide and methane emissions from transportation. For road transportation for the rest of this decade, the manufacturing, assembling, importing, and converting of conventional automobiles into EVs will be promoted; as well as developing a charging station network to meet the demands of individuals and businesses.

For road transportation after 2030, the manufacturing, assembling, and importing of automobiles powered by conventional engines will be, step by step, limited and stopped by 2040. By 2050, all automobiles to be manufactured, assembled, and imported must be EVs. By 2050, the charging station network development will be completed nationwide.

For urban traffic, by 2025 all newly purchased city buses must be electric. Proportions of public transportation by electric city buses by 2030 will be 45-50 per cent for Hanoi, 25 per cent for Ho Chi Minh City, 25-35 per cent for Danang, 20 per cent for Can Tho city, 10-15 per cent for Haiphong, and 5 per cent at least for 1st-grade urban areas.

Meanwhile, by 2030, the proportions of EVs will be 50 per cent at least, and 100 per cent of newly purchased taxis will be EVs. By 2050, all city buses and taxis must be electric. The proportion of such vehicles in public transportation are 40 per cent in special urban areas and 10 per cent in 1st-grade urban areas, at least.

By 2030, with a forecasted population of about 105 million people and average yearly GDP growth rates of about 7 per cent, the Vietnam automobile market demand is projected at 1.8-2 million units.

Realising the business opportunities, many current automobile manufacturers have planned the manufacturing and distribution of EVs in Vietnam. VinFast stopped manufacturing passenger cars with traditional engines and started manufacturing them earlier this year for both domestic and export market demands. In addition, some other firms have also planned the manufacturing and distributing for both markets.

However, Vietnam’s EV manufacturing industry is facing many challenges. The country’s material production is now at a low level of development. Vietnam has no technologies for the manufacturing of key components like lithium batteries, electric motors, inverters, and other electronic components. Most of the tech to manufacture components is bought or transferred from foreign manufacturers.

In addition, EVs need a nationwide charging station network funded by manufacturers and other investors to become popular. At present, the network in Vietnam is still very limited, which makes potential customers hesitant to buy.

Investments in EV manufacturing are also enormous, ranging up to several billion US dollars. Not many investors have enough capital to invest in the manufacturing and distributing businesses.

Finally, tech regulations on safety and environmental protection for EVs and charging station networks are not available yet. It is advisable for the government to promulgate national technical regulations at the earliest time. In addition, the government must consider and promulgate some support and incentive policies for manufacturers and consumers.

vir



NEWS SAME CATEGORY

Cement groups tangle with GHG inventories

Some major cement manufacturers are neglecting greenhouse gas inventories, while others have questions over how to approach effective tools for the work.

Vietnamese sugarcane gears up to cultivate new prospects

In 2023, sugar exporters are likely to benefit from higher export prices and trade remedies imposed by Vietnam, leading to a possible renaissance of sugarcane...

Pepper producers urged to further improve export capacity

To sustain its position as the world’s largest producer and exporter of black pepper, Viet Nam’s pepper sector needs to focus more on improving product quality...

Ha Noi Christmas decorations sales down

With just a few days to Christmas, decorations are being sold on the streets of Ha Noi, but fewer people seem to be buying this holiday season.

Vietnam's rice exports break price records

The market will remain favorable for Vietnam's rice exports through the first quarter of 2023.

Domestic car market sees sluggish sales in year-end sale season

While normally a positive time for car sales, this year the domestic automobile market is seeing gloomy days as Tet approaches, according to local car experts.

Hoa Binh exports first batch of dien pomelo to UK

The first batch of dien pomelo from the northern province of Hoa Binh was exported to the UK on Monday.

Sustainable development holds the key to the success of Vietnamese coffee

Vietnamese coffee industry has made steady headway in the international competitiveness rankings with a processing capacity of 2.36 million tonnes per year...

Piaggio Vietnam affirms important position as it celebrates 15th anniversary

Piaggio set up its direct presence in Vietnam 15 years ago and built two plants, vehicle and engine, and a Research and Development center in Vinh Phuc province. At...

No shortage of pork for Tet holidays: ministry

The Ministry of Agriculture and Rural Develop said that there would be no shortages of pork between now and the Tet (Lunar New Year) holidays.

Commodity prices


MOST READ


Back To Top