Chery, a leading Chinese electric automobile maker, has committed to constructing a US$800 million assembly plant in Vietnam, in collaboration with Geleximco, a diversified Hanoi-based property, finance and industrial group. The facility will complete its first phase in the first quarter of 2026 and is expected to produce 200,000 electric vehicles annually for local and regional markets.
Vietnam’s electric vehicle market holds promise for foreign car manufacturers. Notably, with a car ownership rate of just 5.7 percent, Vietnam’s car market has substantial room for growth. Furthermore, electric car buyers are eligible for incentives such as exemptions from registration fees for the first three years and a 50 percent fee reduction for the subsequent two years, per Decree 10/2022/NĐ-CP.
Nevertheless, foreign car manufacturing firms may encounter challenges related to EV charging infrastructure and electricity supply shortages in Vietnam. These hurdles could potentially hamper manufacturers in expanding their market presence and sales.
In this light, foreign car makers should carefully weigh the pros and cons when considering entering the EV market in Vietnam.
See also: Vietnam’s Automotive Industry 2024: Foreign Investor Cheat Sheet