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Vietnam Electricity denies Apple supplier asked to reduce power use by 30 percent

Vietnam’s state power provider, Electricity Vietnam or EVN for short, has said reports it had asked Apple supplier Foxconn to voluntarily reduce its power use by 30 percent, are incorrect. The original source of the report was a Reuters article based on information provided by ‘two people familiar with the matter’.

In the interests of deciphering what’s true and what’s not, there are a few points to consider.

Firstly, officials asking private firms in Vietnam directly for support, in all manner of things, is common. For example, when Vietnam was looking to raise funds for COVID-19 vaccines it asked a number of big firms, like Samsung, for contributions. In this context, the act of asking a private firm to cut its power use would not be wholly unusual.

It was a request not an order. The Reuters article is pretty clear that it is a suggestion and not a requirement. This has become a little distorted as the story has been rewritten and republished elsewhere. That said, forcing a foreign firm to cut its power use would be extreme with the impact on future foreign direct investment likely substantial. With this in mind, announcing compulsory power cuts will likely be left to the very last minute only when they are all but guaranteed.

There probably will be power shortages this year. It was reported back in April that Northern Vietnam’s electricity consumption could increase by as much as 17 percent this summer. It was also reported that the supply of electricity is slated to have added only 10 percent since last summer’s power outages. The point being, whether big foreign manufacturers have or have not been asked to cut there power use, there is a good chance that if they don’t, there will not be enough power to go around come summer.

See also: Electricity in Vietnam: Foreign Investor Cheat Sheet 2024

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