Vietnam is quickly maturing as an electric vehicle market, and the future will see four major brands – Honda, Pega, Vinfast, and Yadea – competing, even as many smaller brands remain in the fray.
Yadea has announced that it will invest up to USD 100 million in the Vietnamese market. Much of the investment would go towards setting up a new production facility in Bac Giang Province, where the Chinese brand already has an existing facility. The new facility has a two-million-unit production capacity and will also feature a research and development center, employing local talent.
Yadea sells electric motorcycles, scooters, and cycles in Vietnam. The Yadea range in Vietnam is perhaps the widest for any manufacturer – the Chinese brand sells everything from electric bicycles and mopeds to the top-of-the-line Voltguard scooters.
The new facility would cater to Vietnam’s growing love for electric scooters. In 2024, it is estimated that electric scooter sales crossed the half-million mark. Yadea is one of the top three electric scooter brands in Vietnam. With half a million of the overall market, a two-million capacity plant indicates that Yadea is very optimistic about the country’s future as an electric two-wheeler market.
Vietnam Goes Strong on EVs in Policy Measures
Vietnam’s subsidies and incentives for EVs have been primarily targeted at electric cars, rather than electric two-wheelers. This is perhaps to support the homegrown brand Vinfast, but it’s surprising considering Vietnam is a large two-wheeler market, with cities like Hanoi and Ho Chi Minh City having more two-wheelers than residents.
Currently, there is no comprehensive electric vehicle policy incentivizing the purchase of electric two-wheelers in isolation. However, since 2022, the government has exempted all BEVs, including two-wheelers, from first-time registration fees. Further, they get a 50% rebate for the next two years. This policy would stay in force till February 28, 2027.
The government has also reduced the Special Consumption tax (SCT) on BEVs to 1-3%. It’s 35%+ for ICE vehicles. This policy also lasts until Mar 2027, after which the rate will rise to 4-11%.
There are other proposals under review as well (though with no action taken so far), which include differential pricing for EV charging and swapping stations. This is important as VinFast currently runs the largest battery charging and swapping network in the country, and Honda has started rolling out its own network. The government aims to invest USD 14bn in setting up battery charging infrastructure, though it is likely that the passenger car side of the business may get most of the benefits.
There are also talks of manufacturing incentives, but no announcements have been made. There are already import tax incentives that allow importing components that are not currently manufactured locally at zero rates.
Vietnam is a signatory to the Paris Climate Agreement of 2020 and has committed to cutting its Greenhouse Gas (GHG) emissions by 9% in 2030.
There are also some local city-level incentives. Hanoi has proposed the ‘Hanoi Green Growth Strategy’ that sets the target of electric two-wheelers to reach 5% of the total sales in Hanoi by 2030.
The National Automobile Development Strategy (2021-2050), proposed by the Vietnam Automobile Manufacturers Association (VAMA), targets a significant increase in the number of EVs and achieving a domestic production capacity of 3.5 million vehicles by 2040.
Again, this proposal fails to differentiate between electric cars and electric two-wheelers.
A few days back, Honda announced the start of production of the ICON e: compact electric scooter at its Vietnam plant. The Japanese manufacturer also sells the CUV e: in the country through a lease plan.
InsightEV – Global Electric Mobility
Impact
Vietnam is one of the fastest-growing large E2W markets globally. E2W sales have improved from about 300k in 20222 to an estimated 500k in 2024. The real fun is just starting. We estimate that the future growth drivers would be the sub-49kph scooters that include popular models from Vinfast, Yadea, and the newly introduced Honda ICON e:.
As the market matures, we expect more customers to shift from generic Chinese imports to scooters manufactured locally.
InsightEV – Global Electric Mobility
InsightEV – Global Electric Mobility
