Vietnam is witnessing a surge in electric vehicle (EV) manufacturing, positioning itself as a prominent player in the country’s growing tech sector. Notably, certain factors within Vietnam’s economy have the potential to propel it to the forefront of the EV race in the next decade. This report analyzes Vietnam’s key strengths and the conditions that make it a formidable competitor to China in the EV sector.
Vietnam’s Manufacturing Strength
The manufacturing industry stands as a cornerstone of Vietnam’s economy. Currently, the focus of EV and component manufacturing in Vietnam is primarily on domestic production rather than serving global supply chains. This emphasis on manufacturing capabilities places Vietnam in a favourable position to expand its presence in the EV market.
Rapidly Growing Middle-Class Population
Vietnam boasts a rapidly growing middle-class population, a crucial driver of consumer demand. Projections indicate that by 2030, the country will add more than 35 million middle-class consumers, creating a highly lucrative and dynamic EV market. This expanding middle class, coupled with rising fuel costs, positions Vietnam as a promising market for EV adoption.
Emergence of Homegrown EV Segment
Vietnam’s domestic EV market has witnessed a notable rise, exemplified by the success of VinFast, the country’s leading automobile brand. VinFast has even announced plans to establish a manufacturing plant in North Carolina, showcasing its ambition to expand beyond Vietnam’s borders. Additionally, the Vietnamese government has attracted international support for financing and developing the local EV ecosystem.
International Influence in the Vietnamese EV Market
The promising potential of Vietnam’s EV market has attracted the attention of global EV manufacturers. Companies like Hyundai and China-based BYD are poised to enter the Vietnamese EV race, recognizing the untapped opportunities in the country. Furthermore, foreign organizations are establishing their presence in the EV supply chain in Vietnam, leveraging the country’s abundant reserves of nickel, a vital component in EV manufacturing. Notably, Australian mining giant Blackstone Minerals has already initiated operations in Vietnam.
Vietnam: The Next Major EV Player in Asia
Both domestic and international players are actively preparing to meet the rapidly growing demand for EVs in Vietnam. The significant influx of the middle class, characterized by strong disposable income, combined with escalating fuel costs, is expected to drive an imminent boom in the Vietnamese EV market. As a result, Vietnam is poised to become a significant player in the EV sector, rivalling China as a leading force in Asia.
Vietnam’s unique combination of manufacturing capabilities, a burgeoning middle-class population, and international interest in its EV market positions the country as a compelling contender in the global EV sector. As Vietnam continues to capitalize on these factors and further develop its EV ecosystem, it has the potential to emerge as China’s biggest competitor in the EV industry within the next decade.