Vietnam’s Strategic EV Supply Chain Expansion: Kim Long and LGES Partnership as a Gateway to Asian Green Mobility Markets

Vietnam is rapidly emerging as a pivotal player in the global clean energy transition, with its strategic partnerships and policy frameworks positioning the country as a regional hub for electric vehicle (EV) battery production. The collaboration between Kim Long Motor and LG Energy Solution (LGES) exemplifies this trajectory, offering a blueprint for localized manufacturing and global supply chain integration. This partnership, coupled with Vietnam’s ambitious national energy goals, underscores the nation’s potential to reshape the Asian green mobility landscape.

A Gateway to Localized EV Production

The Kim Long-LGES partnership centers on a $46 million investment in a state-of-the-art battery production facility in Hue, central Vietnam. This plant, spanning nine hectares with up to 90% automation, will initially produce 1 gigawatt-hour (GWh) of nickel-cobalt-manganese (NCM) battery cells annually—enough to power approximately 12,500 EVs [4]. By 2026, the facility aims to achieve an 80% localization rate, a critical milestone for reducing reliance on imported components and enhancing cost efficiency [2]. LGES will supply the high-performance NCM cells, while Kim Long will assemble them into complete battery packs, creating a vertically integrated supply chain tailored to Southeast Asia’s growing EV demand [1].

This collaboration aligns with Vietnam’s broader strategy to localize EV production. The government’s Green Transport Action Plan, combined with zero import duties on ASEAN-built EVs and registration fee waivers, has spurred domestic manufacturers like VinFast to target 80% local content by 2026 [1]. Kim Long’s facility, part of a $145 million commercial vehicle plant, further reinforces this trend by leveraging advanced automation and strategic partnerships to meet regional demand for electric buses and commercial vehicles [5].

Vietnam’s Role in the Global EV Supply Chain

The Kim Long-LGES project is not an isolated initiative but a cornerstone of Vietnam’s ambition to integrate into global clean energy networks. The country’s strategic location, participation in trade agreements like CPTPP and RCEP, and a growing digital economy have made it an attractive destination for lithium battery manufacturing [6]. Provinces such as Hải Phòng and Hà Nội are emerging as industrial corridors for battery production, supported by government policies like Resolution 68, which incentivizes private sector investment in green industries [6].

Moreover, Vietnam’s logistics infrastructure is evolving to meet the demands of exporting lithium batteries—a classification as dangerous goods necessitating robust compliance protocols [6]. This infrastructure development, paired with blockchain-enabled customs processes and digital transformation programs, positions Vietnam to efficiently manage cross-border supply chains [5]. The Kim Long-LGES facility, with its focus on cylindrical NCM cells ideal for long-distance electric buses, directly addresses gaps in Southeast Asia’s EV ecosystem, where inter-city transportation electrification remains underdeveloped [3].

Market Dynamics and Investment Opportunities

Vietnam’s EV market is projected to grow at an 18.88% compound annual growth rate (CAGR), reaching $7.41 billion by 2030 [1]. This growth is driven by both consumer demand and policy tailwinds, including a national target to electrify 50% of urban vehicles and 100% of urban buses and taxis by 2030 [5]. The Kim Long-LGES partnership, with its emphasis on localization and quality control, is poised to capture a significant share of this market while reducing costs through domestic production.

However, challenges persist. High upfront costs for EVs and sparse public charging infrastructure in rural areas remain barriers to adoption [1]. Additionally, the government’s retroactive revision of feed-in tariffs for renewable energy projects has raised concerns about investor confidence [2]. Yet, these challenges are being addressed through competitive green auctions and direct power purchase agreements (DPPAs), which aim to stabilize returns for clean energy developers [2].

Strategic Implications for Investors

For investors, Vietnam’s EV supply chain expansion represents a dual opportunity: participation in a high-growth domestic market and access to a regional manufacturing hub. The Kim Long-LGES partnership demonstrates how foreign and local firms can collaborate to overcome supply chain bottlenecks while aligning with global sustainability goals. With Vietnam’s National Power Development Plan VIII (PDP8) targeting 39% renewable energy by 2030 and full EV adoption by 2050, the country is creating a regulatory environment conducive to long-term investment [3].

Conclusion

Vietnam’s strategic EV supply chain expansion, anchored by the Kim Long-LGES partnership, highlights the nation’s potential to become a linchpin in Asia’s green mobility revolution. By combining localized production, global partnerships, and forward-looking policies, Vietnam is not only addressing domestic energy needs but also positioning itself as a critical node in the global clean energy network. For investors, this represents a compelling opportunity to capitalize on a market poised for exponential growth.

Source:
[1] Vietnam Electric Vehicle Market Size & Share Analysis, [https://www.mordorintelligence.com/industry-reports/vietnam-electric-vehicle-market]
[2] From boom to balance in Vietnam's clean energy transition, [https://ieefa.org/resources/boom-balance-vietnams-clean-energy-transition]
[3] Vietnam's Key Role In Asia's Clean Energy Supply Chain, [https://www.fedex.com/en-ph/business-insights/sustainability/clean-energy-vietnam-lithium-batteries.html]
[4] Kim Long Motor partners with LG battery arm in $46 mln central Vietnam project, [https://theinvestor.vn/kim-long-motor-partners-with-lg-battery-arm-in-46-mln-central-vietnam-project-d16835.html]
[5] S Korea's LGES, Vietnam's Kim Long sign NCM battery MoU, [https://www.argusmedia.com/en/news-and-insights/latest-market-news/2726209-s-korea-s-lges-vietnam-s-kim-long-sign-ncm-battery-mou]
[6] Navigating the global supply chain and Vietnam's position, [https://www.sourceofasia.com/navigating-the-global-supply-chain-and-vietnams-position-2025-2026/]