Ample room for Viet Nam’s electric vehicle market to grow: HSBC

According to HSBC, energy transition has been a key focus in Asia in recent years, and Viet Nam is no exception.

As early as 2021 during the COP26 summit, Viet Nam first released the target to achieve net-zero emissions by 2050. In December 2022, the G7 announced a package of US$15.5 billion to assist Viet Nam's decarbonization efforts.

Last May, the long-anticipated Power Development Plan 8 for 2021-2030 was released, setting out a roadmap for Viet Nam's renewable energy goals.

Fortunately, the rise of electric vehicles is contributing to carbon net zero and propelling a sustainable source of long-term economic growth for Viet Nam.

Local electric vehicle makers have been particularly successful in electrifying two-wheelers. Viet Nam's electrifying two-wheelers market is the largest in ASEAN and second-largest worldwide, just behind China.

HSBC estimates that Viet Nam's annual combined electrifying two-wheelers and electric car sales could rise from less than one million in 2024 to over 2.5 million by 2036, which provides a rough sense of this industry's market potential in Viet Nam.

New FDI to manufacturing sector rises 50%

Regarding Viet Nam's economy in April, in its report, HSBC noted that exports rose 10.6 percent year-on-year, driven by electronics (up over 20 percent year-on-year).

That said, an expansion of Viet Nam's manufacturing capabilities through robust FDI inflows should provide a further tailwind to a stronger cyclical rebound when the broader trade cycle picks up.

New FDI to the manufacturing sector rose 50 percent year-on-year, while FDI disbursements also rallied to a multi-year-high, exceeding USD$6 billion in the first four months.

Apple, having already invested close to US$16 billion, has announced its intention to further boost its investment in Viet Nam after its CEO Tim Cook visited the country.

While demand for goods is still recovering, demand for tourism services has been rising. In part thanks to easing its visa policy last year, Viet Nam has welcomed well over 6 million international tourists, suggesting the 17-18 million target by year-end is comfortably within reach.

In fact, its monthly recovery rate has been the highest in ASEAN since February, highlighted the bank./.