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TUESDAY, October 03, 2023
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Vietnam proposes $1,000 incentive to boost electric vehicle use

Vietnam proposes $1,000 incentive to boost electric vehicle use
MONDAY, September 18, 2023

The Vietnamese Ministry of Transport (MoT) has sought feedback on a proposed policy to boost the electric vehicle (EV) industry by offering a US$1,000 subsidy to electric car buyers, a move that could accelerate the shift towards green, eco-friendly energy in the country.

The ministry has circulated a document to seven ministries, the Viet Nam Automobile Manufacturers' Association (VAMA), and five local automobile manufacturing and assembling firms, soliciting feedback for the second time on a policy to encourage the switch to electric vehicles and the use of green energy. A notable feature of this policy is a US$1,000 subsidy for buyers of electric vehicles.

If approved, this policy could be seen as an appealing measure to foster the growth of the electric vehicle sector and the use of environmentally friendly energy.

The Ministry of Transport dispatched the document to the ministries of Industry and Trade, Finance, Planning and Investment, Construction, Justice, Natural Resources and Environment, and Science and Technology.

Simultaneously, it was sent to five domestic automobile manufacturing and assembling firms, namely: VinFast Commercial and Services Trading Limited Liability, Toyota Viet Nam, Ford Viet Nam, Truong Hai Automobile Joint Stock Company, and JSC Thanh Cong Group Joint Stock Company.

The document from the MoT, requesting feedback, indicated that if no comments were received, it would be assumed that the recipients concurred with the draft report.

The MoT noted that as of the end of July this year, approximately 20,065 electric vehicles were in operation, the majority of which were produced and assembled domestically.

Developing charging stations

In relation to the development of charging stations, the MoT has proposed various incentives including support for loan interest rates for the production and import of essential equipment and components for building charging stations and posts, particularly fast charging stations; preferential electricity selling prices and prioritisation of electricity supply for public charging stations; as well as land rent incentives, fund access, and tax exemptions and reductions for organisations and individuals investing in electric charging stations.

MoT statistics reveal that the number of electric cars manufactured, assembled, and imported has surged 75-fold in the past two years. Data from the Viet Nam Register shows that nearly 3,000 electric cars were manufactured, assembled, and imported by August of the previous year, representing a more than 20-fold increase compared to 2019. Additionally, nearly 1.8 million electric motorbikes and scooters are currently in use, catering to the daily needs of the populace.

At present, there are two companies in the country, VinFast and TMT Motors Corporation, that produce and assemble electric cars. Several other firms, such as Thanh Cong Group (TC Group) and Truong Hai Group (Thaco), have also introduced Hyundai and Kia electric car models to consumers.

Furthermore, Geleximco Group signed a sublease agreement with Viglacera Corporation (VGC) last year for a 50-hectare land and infrastructure area, marking the commencement of construction for the Geleximco automobile assembly and manufacturing plant in Tien Hai Industry Park, Thai Binh Province. According to Geleximco's plan, the plant will have a total investment capital of VNĐ19 trillion, equivalent to US$800 million.

Geleximco's car lines will focus on eco-friendly trends, including electric vehicles, fuel cells and the production of components and spare parts.

In addition, the factory also manufactures auto parts and components to supply automobile manufacturing and assembly factories and export-oriented partners.

Thus, it is likely that Vietnam will have more electric car production facilities, after the VinFast factory of Vingroup.

Viet Nam News

Asia News Network

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