Vietnam EV market faces a bumpy road

Higher costs: A Vinfast electric car on a street in Hanoi. The increases in electricity prices affect various sectors including production, business, daily life and services that rely on grid electricity, such as EV charging stations. — AFP

HANOI: Vietnam’s electric vehicle (EV) market will undergo changes in the coming years as the need to transition from internal combustion engine vehicles to electric vehicles (EVs) increases. However, this transition may face challenges related to technical infrastructure and increasing electricity prices in the country.

Vietnam has been experiencing a steady increase in average retail electricity prices over the past 15 years, typically adjusted once a year, with occasional biennial increases. The annual increase in retail electricity prices has ranged from approximately 4.5% to 8.5%.