According to the World Bank, Vietnam needs to sell 78 million electric vehicles (EVs) by 2050 to obtain its emission reduction goal.

In 2022, electric two-wheelers in Vietnam helped reduce gasoline consumed by approximately 390 million liters.

If EV usage follows the proposed policy scenario (SPS), Vietnam will reduce the gasoline volume consumption by 306.401 million liters and 409.416 million liters of diesel compared to a “non-electric vehicle scenario.”

Under the accelerated decarbonization scenario (ADS), the total gasoline and diesel to be saved by 2050 would amount to 360.939 million liters and 524.471 million liters, respectively. This would help Vietnam lessen its reliance on oil imports, thus saving $498 billion in 2024-2050.

Furthermore, transitioning to EVs is expected to create about 6.5 million new jobs in Vietnam's manufacturing sector by 2050, in addition to numerous job opportunities in vehicle maintenance and repair.

Moreover, the transition to EVs would help Vietnam reduce environmental damage costs due to local air pollution, with a decrease of $30 million by 2030 and $6.4 billion by 2050.

Impact on emission reduction

In addition to economic benefits, Bowen Wang, the main author of the World Bank report, emphasized that EVs have a limited role in achieving the 2030 Nationally Determined Contributions (NDC) targets, but will play a crucial role in reaching the zero-emission target by 2050.

Regarding NDC, Vietnam aims to unconditionally reduce greenhouse gas emissions by 64.8 million tons of CO2 equivalent (MtCO2eq) by 2030, from energy related sectors, including transportation. If Vietnam can receive international support in technology and finance, the figure would be 227.0 MtCO2eq.

Once Vietnam obtains the goals of EV penetration as per Decision 876, this will help reduce greenhouse gas emissions by 5.3 MtCO2eq by 2030. The reduction makes up 8 percent of the unconditional emission reduction target for all energy related sectors in NDC.

However, the emission reduction impact from the transition to EVs by 2030 remains modest, as most EVs will be two-wheelers. In the segment that determines the emissions of road transport, cargo trucks have yet to enter the rapid EV adoption phase.

After 2030, especially from 2035 onwards, when Vietnam shifts from two-wheelers to passenger cars, trucks, and intercity buses, the emission reduction impact will increase rapidly.

If all EV usage targets under Decision 876 are achieved, the total greenhouse gas emission reduction from the shift to EVs will be about 226 MtCO2eq by 2050, equivalent to a 60 percent reduction compared to the baseline scenario in the NDC.

In general, Vietnam’s electricity production heavily relies on fossil fuels, particularly coal and gas. Vietnam has also set ambitious goals in the eight national power development plan (Plan 8) to significantly expand renewable energy capacity and transition from coal to gas.

Accordingly, emissions from the power sector may decrease even further as the grid greenization process continues. The decarbonization plans in the power sector has been outlined, but it will need more time to implement.

The World Bank report affirms that transitioning to EVs will have a significant impact on the greenhouse gas emission reduction, regardless of the electricity supply structure on the grid. This is because EVs’ energy-saving efficiency is much higher than that of gasoline- and diesel-run vehicles.

Studies have found that emissions from the production, transmission, and distribution of electricity for EV charging can be easily offset by avoiding the burning of fossil fuels in gasoline- and diesel-run vehicles.

Even if the proportion of power sources in the national grid remains unchanged compared with 2022, the transition to EVs alone will result in a net emission reduction of 2.2 million tons of CO2 equivalent by 2050. If the goal of greening the grid as shown in Plan 8 is fully achieved, the net emission reduction from the transition to EVs will be 5.3 million tons of CO2 equivalent by 2050.

Currently, road vehicles are the largest contributors to greenhouse gas emissions, accounting for about 85 percent of the transport sector’s emissions.

In particular, the combustion of gasoline and diesel in internal combustion engine vehicles emits significant volume of air pollutants such as nitrogen oxides, sulfur oxides, and particulate matter with a diameter of 10 micrometers or less (PM10). 

Therefore, the key benefit of the transition to EVs is the avoidance of air pollutant emissions from internal combustion engines.

Tam An