Hanoi, November 22, 2024 — Transitioning to electric vehicles (EVs) and decarbonizing Viet Nam’s transport sector requires systematic policy and investment across five key areas, according to a new World Bank report: boosting EV supply and production, incentivizing consumer demand, expanding charging infrastructure, preparing the power sector to absorb increasing power demand from EV charging, and developing a skilled EV workforce.
Released today, the report, Viet Nam: Recommendations to the National Roadmap and Action Plan for the Electric Mobility Transition, provides a roadmap for achieving Viet Nam’s ambitious goals, which include raising the share of urban vehicles powered by electricity or green energy to 50 percent, and the share of urban buses and taxis to 100 percent by 2030 and increasing the share of all road vehicles powered by electricity or green energy to 100 percent by 2050. This transition could reduce greenhouse gas emissions by 5.3 million tons of carbon dioxide equivalent (CO2e) (8 percent of Viet Nam’s 2030 emission reduction targets) by 2030 and 226 million tons (60 percent of the target) by 2050.
“Decarbonizing transport with electric vehicles is a complex undertaking, and Viet Nam's commitment is a crucial first step,” said Mariam J. Sherman, World Bank Country Director for Viet Nam, Cambodia, and Lao PDR. “Success hinges on collaboration. Government ministries, private investors, and citizens must work together to reshape the vehicle market, mobility patterns, and energy consumption.”
Through 2035, Viet Nam's EV transition will be driven primarily by two-wheeled vehicles, which are expected to remain the dominant mode for private mobility. Policy interventions, such as facilitating consumer financing, implementing safety standards and testing protocols, incentivizing the supply of electric two-wheelers with higher power and range, and promoting the retirement of gasoline-powered two-wheelers, could boost the share of electric two-wheelers from the current level of 12 percent to 75 percent by 2035. Passenger cars are expected to become the dominant type of private vehicle in Viet Nam after 2035, and electric cars could be the preferred choice among the majority of first-time car buyers, if the needed charging network is in place. The report projects that electric cars will account for 93 percent of car sales in 2036–50 if the stated targets are met.
The move to E-Mobility is critical for public transport and commercial vehicles, as buses and trucks represent 2 percent of registered vehicles but currently contribute 65 percent of emissions. Transitioning to electric buses requires strong policy interventions to address low ridership, set new standards, and ensure financial viability. Electrifying small commercial trucks under 5 tons using battery EVs is promising. For larger heavy-duty trucks, measures like improving fuel standards and promoting freight demand to move to railway and waterway transport will remain critical for decarbonization.
Viet Nam's power sector is not expected to face a significant strain from EV charging before 2030, but the impact will grow thereafter. To meet rising EV charging demand, Viet Nam will need to increase electricity generation by up to 5 percent and network capacity by 4 percent by 2035. By 2050, these figures rise to 30 percent for electricity generation and 15 percent for transmission capacity if the government’s EV adoption targets for 2050 is fully achieved. As such, Viet Nam will need to invest up to $9 billion in additional power sector investments by 2030 to support EV growth, and $14 billion a year between 2031 and 2050, on top of investment for implementing the current Eighth Power Development Plan.
The report was prepared with financial support from the Australian Government through the Australia– World Bank Strategic Partnership (ABP2).
