IS VIETNAM LAGGING BEHIND IN DEVELOPING EV CHARGING INFRASTRUCTURE?

Initiating Priority Policy for Charging Station Development

With the increasing sales of domestic electric cars, active participation of imported electric car manufacturers, and the flourishing electric vehicle transportation services, Vietnam is facing several challenges in the development of charging station infrastructure in the coming years.

Chính sách hỗ trợ doanh nghiệp đầu tư phát triển trạm sạc tại Việt Nam chưa đủ hấp dẫn?
Chính sách hỗ trợ doanh nghiệp đầu tư phát triển trạm sạc tại Việt Nam chưa đủ hấp dẫn. Ảnh: Lê Vũ.
The issue regarding charging stations has garnered more attention from users since the “My Tien” decision by VinFast in late November of last year. Ambitious strategies, effective communication, and the pride of “Vietnamese people prioritizing Vietnamese products” have propelled the sales of VinFast electric cars, including VF e34 and VF 8, to a remarkable high. Since April 2023, these two models have entered the top 10 best-selling cars of the month with stable sales figures, in contrast to the overall sluggish trend of the car market.

According to the Ministry of Transport (GTVT), from 2018 to the end of 2022, there were 7,780 electric cars nationwide. Since the beginning of 2023, this number has increased by 12,285 units, most of which are electric cars from VinFast. In addition, domestic car manufacturers such as TMT Motor, THACO, TC Motor, and foreign car brands like OMODA, Wuling, Haima, Haval, Zhidou, Lynk & Co… have been preparing to debut their first electric car products in Vietnam. This indicates a period of rapid growth for the electric vehicle market and it may soon “explode” within a few years.

In contrast, the development of charging station infrastructure in Vietnam does not look bright. Currently, VinFast is the sole owner of 150,000 charging ports installed in 63 provinces and cities nationwide (data from 2021). In the past two years, VinFast has focused more on new product lines, battery technology development, transportation services, car exports, IPO plans, and building factories in the US, etc. VinFast has not officially announced its plans for the next phase of the charging station system expansion. In addition, the Vietnamese electric car brand has stated that it will “not share charging station infrastructure with rival brands for at least 10 years.” Aside from this, a few energy sector businesses have begun initiating projects to build and install charging stations and ports to meet the needs of individuals and businesses. However, the scale of these projects is still relatively small.

Therefore, the demand for charging stations is becoming increasingly urgent which requires the government to come up with solutions to promote electric car development in Vietnam. After a long time studying the market, consulting expert opinions, and receiving input from the automotive industry, the Ministry of Transport has recently proposed a policy to support the transition to electric cars and submitted a report to the government. In this proposal, the Ministry recommended the government establish regulations for the electric charging station system within urban technical infrastructure. Accordingly, new construction or renovation projects are allowed to build charging stations without needing to change the land use purpose. There should be investment incentives, support for financing the production/import of equipment and components required to build charging station infrastructure, especially fast-charging stations, along with preferential policies for taxes, electricity prices, and power supply for charging stations to operate,…

Mr. Nguyen Ngoc Cuong, CEO of the charging infrastructure specialist company EverEV, believes that Vietnamese enterprises are fully capable of manufacturing and installing charging stations. However, due to a lack of domestic suppliers, businesses have to collaborate with foreign suppliers. Therefore, it is essential to support and incentivise manufacturing/importing of equipment and components for charging station infrastructure.

Prior to this, the Ministry of Industry and Trade collected public opinions on the Draft Decision of the Prime Minister on regulating the retail electricity pricing structure. Notably, the Ministry proposed adding electricity prices for electric vehicle charging stations. Retail electricity prices will be divided according to voltage levels, normal hours, low peak hours, and high peak hours. Among these, the lowest price is 68% of the average retail electricity price (1,306 VND/kWh) and the highest is 205% of the average retail electricity price (3,937 VND/kWh). These prices do not include VAT.

“Applying commercial electricity prices to charging stations is of great significance. Along with new updates on standards, simplified procedures for building charging stations compared to establishing petrol stations will undoubtedly encourage businesses to invest in this field. This cannot be delayed any longer,” said Mr. Cuong.

The home charge trend

In reality, daily charging is a problem not only faced by customers who purchase imported electric cars but also by VinFast users. In forums and groups dedicated to electric cars, many believe that there would be no issue if they were to travel outside the province, or even cross Vietnam with an electric car, as VinFast charging stations are available along national roads and rest stops. However, as the number of electric car users increases, challenges arise when driving within cities. Especially since the advent of electric taxi services and various taxi companies racing to invest, charging stations are frequently congested. Moreover, there is still a problem of gasoline-powered vehicles parking at charging station locations, but there are no clear sanctions to penalize this behavior.

According to EverEV’s research, the electric car market will continue to grow strongly in the second half of 2023. Car buyers include not only pioneers with a taste for technology experiences but also four new customer types. First, individual buyers purchasing cars to replace their primary vehicles. Second, business customers purchasing cars for transportation operations. Third, businesses with a need to reduce transportation costs for employees using cars. Fourth, businesses engaged in electric bus operations, which is currently a “private playground” of VinFast.

Among them, many customers opt to purchase wall-mounted home chargers for convenient daily charging of their personal electric cars, providing faster charging compared to the portable chargers provided by manufacturers. Some households without a garage or space for a wall-mounted charger have come to agreements with other families that have suitable spaces and pay based on electricity usage.

For taxi companies, the need for daily charging is increasingly urgent. Due to the large number of vehicles, with hundreds in their fleet, extended charging times result in significant losses for these businesses. To address this issue, many companies have installed Home Chargers, and some even consider installing fast-charging stations in their parking and assembly areas.

“For a VF e34 or VF 5 Plus driver covering around 300 kilometers per day, which equates to charging twice a day, the need to reduce charging time for this customer segment is significant to ensure profitability,” said Mr. Nguyen Ngoc Cuong, CEO of EverEV.

According to representatives from EverEV, home charging is just an option, not the fundamental solution for electric car users. In the long run, the focus should still be on developing public charging station systems, particularly fast-charging stations, to effectively encourage users to transition to electric cars.

Source: Le Vu – vneconomy.