World Bank Proposes Electric Mobility Roadmap for Vietnam

A newly published report by the World Bank, titled “Recommendations to the National Roadmap and Action Plan for the Electric Mobility Transition,” outlines a strategic plan for Vietnam’s shift toward electric transportation.

By the year 2030, it is projected that half of the urban vehicles, along with all buses and taxis, will need to be electric. By 2050, all road vehicles are expected to transition to electricity or environmentally friendly fuels.

This shift is anticipated to cut carbon dioxide emissions by 5.3 million tons, achieving an 8% reduction in Vietnam’s emissions target by 2030, and a significant 226 million tons, or 60%, by 2050.

The current reliance on petrol and diesel in vehicles powered by internal combustion engines results in substantial environmental pollutants, including nitrogen oxides, sulfur oxides, and particulate matter known as PM10.

These emissions contribute to air pollution, posing serious environmental issues and health risks for the population.

Research indicates that road transport is responsible for a large proportion of greenhouse gas emissions, accounting for 85% of the transport sector’s total emissions. In 2022, motorbikes emitted 28% of the total, with buses and coaches at 11%, cars at 6%, and trucks at 56%.

Last year, the Vietnamese Prime Minister initiated an action plan targeting carbon and methane emission reductions in the transport sector through Decision 876, established in July 2022.

This pivotal decision represents Vietnam’s first systematic approach to reduce the transport sector’s share of overall greenhouse gas emissions by 7.2%.

It also marks a significant advancement toward achieving the country’s Nationally Determined Contributions (NDC) linked to the Paris Agreement, with a vision for reaching net-zero emissions by 2050.

The World Bank report also emphasizes the need for policies that support electric vehicle adoption, in line with the objectives laid out in Decision 876.

Though challenging, the transition involves creating a comprehensive ecosystem focused on improving electric public transport, including vehicle production, incentives for electric vehicles, establishing charging infrastructure, and preparing the energy sector for increased electric vehicle usage.

The process will commence with the formation of an inter-governmental agency responsible for coordinating efforts. Key ministries like Industry and Trade, Transport, Planning and Investment, Science and Technology, and Finance will play vital roles within this agency.

The effectiveness of this agency is crucial for maximizing efficiency and managing costs throughout the transition.

To meet electric vehicle targets, sales of clean-fuel vehicles must rise from 500,000 in 2022 to 1.5 million by 2030, and reach 7.3 million by 2050. This equates to a demand for 7 million electric vehicles during 2024-2030 and 71 million from 2031-2050.

Although demand for two-wheel vehicles is expected to decline by 2035, they will remain the primary mode of transport in Vietnam.

Vietnam ranks as the second-largest market for two-wheel vehicles globally, following China. In 2022, electric two-wheelers constituted 12% of all two-wheel sales, positioning Vietnam well to enhance the widespread adoption of electric two-wheelers (E-2W).

The electric two-wheeler market in Vietnam is vibrant and competitive, with numerous suppliers offering diverse options. Urban consumers show strong acceptance of E-2Ws.

As for personal cars, the World Bank sees a significant opportunity for Vietnam to move away from gasoline and diesel vehicles and transition to electric personal cars (E-PC).

It is anticipated that within the next decade, personal cars could replace two-wheel vehicles as the preferred choice. During this period, the competitiveness of E-PC prices will improve as their performance enhances.

VinFast, the pioneering electric vehicle manufacturer in Vietnam, debuted its first E-PC in 2021, capturing 14% of the personal car market share that same year.

Currently, certain models of VinFast’s E-PC are priced similarly to traditional personal cars. The company reported delivering 11,000 electric vehicles of various types in October 2024.