As air pollution in big cities passes far beyond acceptable limits, the interest in electric vehicles is rising.
However, the lack of an adequate charging infrastructure looks to be a major roadblock on the journey towards a clean vehicle transition. .
Le Manh Quan, an officer in Hanoi and proud owner of a VinFast electric motobike, is looking forward to purchasing an electric car of the same brand next year. However, he has deep-rooted concerns about finding a charging station while on the road in the capital.
“I am eager to cut down my carbon footprint during my daily commute and I am interested in owning an electric automobile,” Quan told VIR. “But finding a charging station for the vehicle is a big problem. The streets of Hanoi are always crowded.”
Amid the shortages of charging stations and suitable legal frameworks for electric vehicles (EVs) to flourish in Vietnam, local consumers like Quan may have to wait for a bit longer before their dreams of using one in the country can come true. This means that air pollution caused by petrol-powered vehicles remain uncontrollable in the major cities, afffecting people’s livelihoods.
“Thus, using an electric bike may be one of the best ways to reduce pollution,” Quan told VIR.
In an attempt to advance the market of bigger electric vehicles, VinFast in July entered into co-operation with Austria-based electrified transportation firm Kreisel Electric to develop a battery pack solution for electric cars and buses that will be manufactured at the VinFast manufacturing complex in the northern port city of Haiphong.
Three years ago, US electric car company Tesla acquired solar panel manufacturer SolarCity for $2.6 billion, aiming to develop new types of vehicles powered by green energy. It could very well be that VinFast is taking a page from Tesla’s book in order to build up the EV market in Vietnam, essentially from scratch through heavy investment in both the vehicles themselves and the associated infrastructure that makes them a viable transport option.
Previously, VinFast also shook hands with state-run PVOil, one of the largest oil distributors in the country, to develop 30,000-50,000 charging stations across Vietnam by 2020. So far, however, only 200 charging stations at VinMart+ convenience stores have been put into operation.
To date, Mitsubishi Motors has delivered four electric cars and two fast-charging stations to Danang Department of Industry and Trade, and one electric car and one charging station to the Ministry of Industry and Trade (MoIT) for testing. In early 2018, Mitsubishi signed an MoU with the MoIT’s Industry Agency on R&D of EVs in Vietnam.
Mitsubishi also partnered up with the Central Power Electronic Measurement Equipment Manufacturing Centre to build the first charging station in the central city of Danang for electric cars. Its system can use both solar power and grid electricity to charge vehicles.
With only two companies working on charging stations, there is a tremendous gap between available charging infrastructure and the local demand for EVs, and the segment will not be able to take off without proper foundations.
However, developing such a charging system is expensive. According to research company McKinsey & Company, the cost of one fast-charger could be up to $200,000. Hence, investment in outside stations will need to be much larger and may put a burden on manufacturers in Vietnam.
Strong global performance
Along with Vietnam, other global markets have been struggling with the pricey investment in EV charging stations.
According to data published by McKinsey & Company, the electric automobile industry in 2030 will need 40 million chargers, equalling $50 billion in capital, across China, Europe, and the Americas.
Many nations such as China, Japan, the United States, and those in Europe have been introducing incentives for EVs like encouraging R&D activities, supporting infrastructure development, cutting taxes, and even tightening emissions standards for gas-fuelled vehicles.
Charging infrastructure for EVs in China has reported rapid growth. According to the China Electric Vehicle Charging Infrastructure Promotion Alliance, by the end of June, single charging stations for EVs in China totalled more than one million units, with an on-year growth of 69.3 per cent.
Public charging stations in China totalled 412,000 by the end of June while the number of private ones stood at 591,000.
A total of 10,926 public charging stations were built in June, and 11,656 public charging piles were built monthly from June 2018 to last month, which resulted in an overall growth of 51.5 per cent on-year.
A further McKinsey & Company report last year predicted public charging would dominate and increase in importance in China, moving from 55 to 60 per cent in 2020 to approximately 80 per cent by 2030.
Meanwhile, in Europe, the number of charging points has increased rapidly from 3,200 in 2010 to nearly 154,800 last year.
The five most active nations in this expansion are the Netherlands (36,962 chargers), Germany (26,162), France (24,770), the United Kingdom (18,158), and Norway (11,535), making up about 76 per cent of the total chargers in Europe. The UK government has just begun a pilot for electric re-charging lanes for EVs, following the example of Stockholm in Sweden.
In Japan, four giants of Toyota, Honda, Nissan, and Mitsubishi are collaborating to grow the EV charging infrastructure.
Recommendations for Vietnam
Meanwhile, several city bus operators in both Hanoi and Ho Chi Minh City are planning to operate some routes with electric buses.
To set up these projects, charging stations will be constructed at the city bus terminuses in co-operation with local power companies, as an optimal solution to share the investment burden on setting up charging infrastructure.
In August, VinFast officially introduced its innovative VinBus electric brand at its local manufacturing complex.
The country’s first electric automobile manufacturer plans to put about 3,000 electric buses into operation next year in Hanoi, Ho Chi Minh City, Haiphong, Danang, and the Mekong Delta city of Can Tho – all of which will also be the key markets for EVs in the next five years.
Experts have suggested that charging stations be developed in the main cities, tourism centres, and along the most frequented highways, noting that the best way to develop a charging station network is to enhance co-operation with local power companies.
The collaboration between vehicle manufacturers and energy suppliers to mature the electric automobile infrastructure will be an inevitable trend that could make and break the segment – and to ensure the smooth development of this key green transit, the government will soon issue incentives like cutting taxes and encouraging R&D activities to favour the industry. VIR