Vietnam's EV Revolution: Strategic Investment Opportunities in a Rapidly Electrifying Market

The Vietnamese automotive sector is undergoing a seismic shift as electric vehicles (EVs) and hybrids surge in popularity, driven by aggressive government incentives, rising consumer demand, and the entry of global automakers. With tax exemptions extended through 2027 and VinFast leading the charge, Vietnam is poised to become a regional hub for green mobility. Investors looking for high-growth opportunities should focus on domestic manufacturers, EV components, and foreign firms adapting to Vietnam's localization push.

Policy Support: A Catalyst for EV Adoption

Vietnam's government has doubled down on electrification, extending EV registration fee exemptions through February 2027 under Decree 51/2025. This policy offers a 100% exemption on registration fees for battery electric vehicles (BEVs), a critical cost-saving measure for consumers. The move builds on earlier incentives, such as a 15% special consumption tax for EVs compared to 35–50% for gasoline vehicles, which have already spurred a 1,540% increase in monthly EV sales from 404 in 2022 to 6,648 in 2024.

The policy extension aligns with Vietnam's 2030 targets: 30% of four-wheeled vehicles and 22% of two-wheelers to be electric. By reducing barriers to ownership and signaling long-term commitment, the government has created a stable framework for investors.

VinFast: The Undisputed Leader

No company embodies Vietnam's EV boom better than VinFast, the country's first global EV brand. Its market share has skyrocketed from 9.2% in 2023 to 21.3% in 2024, thanks to affordable models like the VF3 and VF5 mini SUVs, which command waiting lists and viral social media buzz. VinFast's price cuts—up to 14% in 2025—reflect its strategy to dominate the mass-market segment.

The company's ambitions extend beyond vehicles. Its subsidiary VinES is building Vietnam's first large-scale lithium-ion battery plant, aiming to produce one million batteries annually by 2025. This vertical integration reduces reliance on imports and positions VinFast as a full-stack EV player.

Investors tracking VinFast's parent company, Vingroup (VIG), will note a correlation between its stock performance and EV sales growth.

Foreign Automakers: Playing the Localization Card

Global brands are rushing to capitalize on Vietnam's EV boom, but success hinges on local assembly. China's BYD, Hyundai, and Kia have already established production hubs, while Tesla is exploring partnerships.

• Geleximco-Chery's $800M assembly plant and Skoda's first Southeast Asia factory underscore the shift toward domestic manufacturing, which qualifies firms for 50% registration fee cuts under Decree 51/2025.
• BYD's EVs, priced 30% lower than imports, are gaining traction, while Hyundai's IONIQ 5 targets premium buyers.

The lesson for investors: prioritize firms that localize production and align with Vietnam's “local content” rules, which require 40% domestically sourced parts by 2025.

The Demand Side: A Green Consumer Wave

Vietnam's urban middle class—now 33% of the population—is driving EV adoption. Key trends include:
1. Environmental Awareness: 70% of consumers are open to EVs (KPMG, 2024), with younger demographics leading the charge.
2. Fuel Cost Sensitivity: Gasoline prices rose 2% in 2025, making EVs' 50% lower operating costs increasingly attractive.
3. Infrastructure Growth: VinFast's V-Green initiative aims to install 2,000 charging stations by 2025, addressing a critical bottleneck.

The result? EVs and hybrids now account for 22% of new car sales (2024), with projections of 15–20% annual growth through 2027.

Investment Opportunities: Where to Play

1. Domestic Manufacturers:
2. VinFast/VinES: Leadership in both vehicles and batteries makes them a must-watch.

3. Dat Bike: Dominates the e-motorcycle segment, with affordable models targeting urban commuters.

4. EV Components:

5. Batteries: VinES and Samsung SDI's partnerships highlight opportunities in lithium-ion production.

6. Charging Infrastructure: Firms like Petrolimex (which plans 5,000 stations by 2030) and VinFast's V-Green are critical to scaling adoption.

7. Foreign Players with Localization:

8. BYD/Chery: Benefit from low-cost production and strong local partnerships.
9. Tesla: Watch for its entry into Vietnam's premium EV market.

Risks and Considerations

• Supply Chain Dependence: Vietnam still imports 70% of vehicle components. Invest in firms reducing reliance on imports (e.g., VinFast's battery plant).
• Infrastructure Lag: Charging networks must scale rapidly to meet demand.
• Trade Barriers: U.S. tariffs on non-FTA partners limit exports, but Vietnam's 18 free trade agreements (including ASEAN) provide alternatives.

Conclusion: A Green Gold Rush

Vietnam's EV sector is a growth juggernaut, with a CAGR of 18.12% expected to push the market from $2.4B to $6.7B by 2030. Investors should focus on VinFast's ecosystem, EV components, and foreign firms committed to localization. While challenges like supply chain risks remain, Vietnam's policy support and consumer momentum make this a sector ripe for strategic bets.

The trajectory points to high-growth opportunities for investors willing to navigate Vietnam's green transformation.

Act now—before the road gets crowded.