Currently, two-wheelers are the most popular means of transport in Vietnam. The country is gradually moving towards electrification. With technological development and growing concerns regarding the environment, significant growth in the electric two wheeler (E2W) market is expected by 2025. This article examines the key drivers of the shift, challenges to be tackled, and the outlook for Vietnam Electric Two-Wheeler Market.
Economic Outlook and Forecasts
Two-wheelers dominated the 2020 transport Vietnam Electric Two-Wheeler Market with about 65.2 million two-wheelers in operation which calculates to an impressive figure of 670 two-wheelers for every one thousand individuals.
The numbers clearly demonstrate the reliance on two-wheelers as a transport mode in Vietnam. Although electric models have a relatively small market share currently, they are becoming more popular at a rapid pace. Between 2025 and 2030 the Vietnam Electric Two-Wheeler Market is expected to grow at a Compound Annual Growth Rate (CAGR) of 6.8%.
This surge is expected due to the combination of changes to improve the country’s infrastructure, addressing the challenges of sustainable transport systems, and the need for reasonably priced transport options.
Main Factors Impacting Growth
The following factors are directly impacting the demand for Vietnam Electric Two-Wheeler Market:
Environmental Impact: Vietnam’s urban areas have some of the world’s worse air quality. Emission cuts and enhanced sustainable development are essential, accelerating the move toward electric transportation can drastically improve this.
Government Policies: In an attempt to lower the country's carbon emissions the Vietname government is fostering the use of electric vehicles (EVs) through subsidy policies. This will in turn be beneficial for the E2W market as well.
Technological Improvements: The development of new battery technologies has resulted in lower charging time and increased travelling distance, creating more value for consumers using electric two-wheelers.
Domestic brands like VinFast are able to produce designs specifically cater for Vietnam, further increasing the appeal of E2Ws.
Economic Factors: As with other electric forms of transportation, Electric Two Wheelers have lower operational costs than fuel combustion models which makes them an affordable means of travel for the general population.
Overcoming Said Challenges
Despite having a positive outlook, there are many areas that Vietnam Electric Two-Wheeler Market faces challenges:
Education: Consumers require additional lessons on the value and functions of electric two wheelers so that they can help change the perception regarding them.
Charging Infrastructure: Even though there is some form of charging infrastructure, it is severely lacking, especially in rural areas.
Periphery Spending: Though electric two wheelers may cost less over time in comparison to traditional gas two wheelers, the initial cost is much greater which may steer away consumers sensitive to price.
Predicted Changes
Vietnam's market for electric two wheelers, and particularly E2Ws, is forecasted to grow in the near future. Provided there is continued investment from the government, more innovations in technology and growing focus on environmental matters, the adoption of E2Ws is foreseen to rise at a rapid rate. Major commuter cities like Hanoi and Ho Chi Minh City are at the forefront of the shift, with many motorcyclists looking for alternatives to their fuel-powered two wheelers.Electric powered two wheelers have gained popularity in Vietnam due to their convenience and portability.To sum up, the electric two-wheeler market in Vietnam is undergoing a unique shift and, with the goal of achieving a sustainable future, aims to make electric two-wheelers, by the year 2025, the staple mode of transportation in Vietnam, while requiring a joint effort from the government, industry players, and citizens alike.
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