Vietnam Electric Commercial Vehicle Market Comprehensive Analysis {2028} Key Trends and Players
The global automotive industry is witnessing a significant shift towards electric vehicles (EVs), driven by the increasing focus on environmental sustainability, fuel efficiency, and the need to reduce greenhouse gas (GHG) emissions. Vietnam, an emerging economy in Southeast Asia, is no exception to this trend.
The Vietnam Electric Commercial Vehicle Market is projected to grow at a double-digit compound annual growth rate (CAGR) during the forecast period, driven by the increasing need for fuel-efficient and emission-free vehicles, as well as growing demand in key sectors such as logistics.
This report delves into the dynamics of the electric commercial vehicle market in Vietnam, exploring key factors influencing its growth, including market segmentation by propulsion type and range, government policies, and the competitive landscape.
Vietnam Electric Commercial Vehicle Market Drivers
Increasing Need for Fuel-Efficient and Emission-Free Vehicles
With rising concerns over climate change and air pollution, the demand for vehicles that are both fuel-efficient and emission-free has grown exponentially. Vietnam, as part of global environmental agreements and national regulations, is increasingly focusing on reducing carbon emissions.
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Electric commercial vehicles, particularly trucks used in the logistics industry, offer a viable solution to combat these environmental issues. As businesses in Vietnam grow, the need for more sustainable modes of transport becomes critical, pushing the demand for electric commercial vehicles.
Growing Demand in the Logistics Industry
The logistics industry is a key driver of the demand for electric commercial vehicles in Vietnam. As e-commerce continues to expand, the need for reliable, efficient, and cost-effective transportation solutions becomes crucial. Electric trucks, with their reduced operating costs and zero emissions, are becoming an attractive option for logistics companies looking to optimize their operations while contributing to environmental goals.
Vietnam Electric Commercial Vehicle Market Segmentation by Propulsion Type
- Battery Electric Vehicles (BEVs)
Battery Electric Vehicles (BEVs) are expected to dominate the electric commercial vehicle market in Vietnam, accounting for the largest market share in 2022. BEVs run entirely on electricity stored in batteries, making them emission-free and highly energy-efficient. The adoption of BEVs is anticipated to grow at the highest CAGR during the forecast period, driven by technological advancements in battery technology, increasing charging infrastructure, and government incentives to promote electric vehicle usage.
- Hybrid Electric Vehicles (HEVs)
Hybrid Electric Vehicles (HEVs) combine an internal combustion engine with an electric motor, offering a balance between fuel efficiency and emission reduction. Although HEVs are less dominant in Vietnam compared to BEVs, they still play a role in reducing fuel consumption and emissions in the commercial vehicle market.
- Plug-in Hybrid Electric Vehicles (PHEVs)
PHEVs are another category of electric commercial vehicles, featuring a larger battery that can be recharged through an external power source. This category allows for limited electric-only driving, but can switch to a gasoline engine when the battery is depleted. PHEVs offer a flexible solution for businesses operating in areas where charging infrastructure is not yet fully developed.
- Fuel Cell Electric Vehicles (FCEVs)
FCEVs, which use hydrogen to generate electricity, are also a part of the Vietnam electric commercial vehicle market. Although their adoption is limited due to the nascent state of hydrogen infrastructure, FCEVs have the potential to grow in the coming years, especially for long-distance transportation, as they offer longer ranges and shorter refueling times compared to BEVs.
Impact on the Vietnam Electric Commercial Vehicle Market
Decline in Vehicle Sales in 2023
The COVID-19 pandemic had a significant impact on the global automotive industry, and Vietnam was no exception. Amidst lockdowns and restrictions on movement, vehicle sales in Vietnam experienced a decline in 2023. The disruption of supply chains, reduced consumer spending, and operational challenges for manufacturers and dealers contributed to this downturn.
Recovery and Market Growth
Despite the temporary setback in 2023, the market for electric commercial vehicles in Vietnam is expected to recover and grow in the coming years. The Vietnamese government’s focus on reducing GHG emissions and providing incentives for the purchase of electric vehicles are anticipated to drive the market’s growth through 2028. Moreover, as businesses and consumers adapt to post-pandemic realities, there is likely to be a renewed focus on sustainability, further boosting demand for electric commercial vehicles.
Government Initiatives and Policy Support
Incentives for Electric Vehicle Adoption
The Vietnamese government has introduced several incentives to encourage the adoption of electric vehicles. These include tax reductions, subsidies for EV buyers, and investment in charging infrastructure. Such policies aim to reduce the upfront cost of electric vehicles, making them more accessible to businesses and consumers alike.
Partnership with Mitsubishi Motors
In a bid to accelerate the adoption of sustainable automotive technologies, Mitsubishi Motors is collaborating with the Vietnam Industry Agency under the Ministry of Industry and Trade. This partnership focuses on studying the efficient usage of electric vehicles in Vietnam and exploring public policy programs that can support the rapid adoption of EVs. Such collaborations are crucial for fostering a supportive ecosystem for electric commercial vehicles in Vietnam.
Vietnam Electric Commercial Vehicle Market Segmentation by Range
- 0-150 Miles: Electric commercial vehicles with a range of 0-150 miles are typically used for short-distance applications, such as urban deliveries and local logistics operations. This segment is important for city-based businesses that require efficient, emission-free transportation for daily operations. However, this range category is expected to grow at a moderate rate as businesses seek vehicles with longer ranges to enhance operational flexibility.
- 151-250 Miles: The 151-250 miles range category offers more versatility for commercial operations, allowing businesses to expand their service areas beyond city limits. This segment is anticipated to witness significant growth during the forecast period, driven by improvements in battery technology and the expanding network of charging infrastructure in Vietnam.
- 251-500 Miles: Vehicles in the 251-500 miles range segment are suitable for long-distance transportation and intercity logistics. As the demand for more efficient long-haul transportation grows, this segment is projected to experience robust growth, with more electric commercial vehicles being developed to cater to this need.
- 500 Miles and Above: The above 500 miles range segment is anticipated to grow at the highest CAGR during the forecast period, largely due to the increasing production and sales of electric buses. Electric buses are becoming an essential part of public transportation systems in Vietnam, offering a sustainable alternative to traditional diesel-powered buses. The demand for long-range electric buses is expected to rise, as governments and transportation agencies prioritize reducing emissions in urban and intercity transit.
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Competitive Landscape of Vietnam Electric Commercial Vehicle Market
Major Players in the Vietnam Electric Commercial Vehicle Market
The Vietnam electric commercial vehicle market is home to several major players, both local and international, that are actively involved in the development and commercialization of electric commercial vehicles. Some of the leading companies operating in this market include:
- Daimler: A global leader in commercial vehicles, Daimler is focusing on the development of electric trucks and buses, offering a wide range of electric solutions for the Vietnamese market.
- Tesla: Known for its innovation in the electric vehicle sector, Tesla is expanding its presence in the commercial vehicle market, with a focus on electric trucks.
- Proterra: A key player in the electric bus market, Proterra offers high-performance electric buses that are designed for urban transportation.
- Nissan: Nissan is investing in electric vehicle technology, offering a range of electric commercial vehicles that cater to various business needs.
- BYD: As one of the largest electric vehicle manufacturers in the world, BYD is focusing on expanding its electric commercial vehicle offerings in Vietnam, particularly in the electric bus segment.
- Honda: Honda is developing electric commercial vehicles as part of its broader strategy to transition towards sustainable mobility solutions.
- Hyundai: Hyundai is actively investing in electric vehicle technology, with a focus on electric buses and trucks for the commercial vehicle market in Vietnam.
- VDL: VDL is a European manufacturer that is expanding its presence in the Vietnamese market, offering electric buses for public transportation.
- ABB: A leader in electric vehicle charging infrastructure, ABB is supporting the growth of the electric commercial vehicle market by providing advanced charging solutions.
- Volvo: Volvo is developing electric trucks and buses for the Vietnamese market, with a focus on sustainable transportation solutions.
Technological Advancements and Mergers
Many of the companies operating in the Vietnam electric commercial vehicle market are investing heavily in research and development to bring new products and technologies to market.
Advanced battery technology, improved charging infrastructure, and enhanced vehicle design are key areas of focus.
Additionally, several companies are pursuing mergers and strategic partnerships to strengthen their market position and cope with increasing competition. These collaborations are helping companies pool resources, share knowledge, and accelerate the development of electric commercial vehicles.
Conclusion
The Vietnam electric commercial vehicle market is poised for significant growth during the forecast period, driven by increasing demand for fuel-efficient, emission-free vehicles, and growing awareness of environmental sustainability.
Battery Electric Vehicles (BEVs) are expected to dominate the market, while long-range electric vehicles, particularly electric buses, are anticipated to experience the highest growth. Government incentives, partnerships with international companies, and advancements in technology are all playing a pivotal role in shaping the future of the market.
As the demand for electric commercial vehicles continues to rise, major players in the industry are focusing on innovation, collaboration, and strategic expansion to stay competitive in this dynamic market.
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