Charging station service – promising business amid EV era
With the commencement of the electric vehicle (EV) era, a large number of charging stations are likely to be installed in the time to come, forming a new and promising business sector.
According to an action programme on green transition, carbon and methane emission reduction in the transport sector that was approved by the Prime Minister’s in July, from 2025 all new buses in Vietnam must be EVs or those using green fuels. By 2030, all new taxis must run by electricity or green fuels. In 2050, all road vehicles should be powered by electric or green energy.
Nguyen Minh Dong, Director of Duc Viet Technology Consulting Company said that based on this roadmap, from 2025, plans to develop cars using gasoline and oil in Vietnam will gradually stop and be replaced by plans to manufacture EVs. It is forecasted that from 2025 onwards, EVs will see rapid growth and increasing popularity.
Right from 2023, businesses have accelerated the development of EVs in the Vietnamese market. TMT has introduced mini EV model Wuling HongGuang, while Hyundai Thanh Cong launched the EV model Ioniq 5, and VinFast launched a series of new models, namely VF3, VF6 and VF7, manufactured and assembled in Vietnam. In the near future, the automobile market will be bustling as many pure EV models are expected to be introduced.
BMI Research, a research firm of credit rating Fitch Solutions, predicted that Vietnam’s EV sales volume will doubled in 2023 to 18,000 units. The market is forecast to grow 25.8% per year in the 2023-2032 period with 65,000 units sold each year from only 8,400 units reported in 2022.
The Vietnam Automobile Manufacturers' Association (VAMA) also predicted that Vietnam will have about 1 million EV operating in 2030 and 3.5 in 2040.
The booming of EVs will require the development of charging stations, opening up great opportunities for investors.
Currently, in Vietnam, there are two businesses supplying charging station services for EVs – VinFast and EVIDA with the EBOOST smart electric vehicle charging product.
VinFast is developing charging stations with about 150,000 charging ports nationwide, with a charging cost of VND3,210.9 (US$0.13) per kWh, while EVIDA is offering the service at a price of VND8,900 per kWh, excluding the activation fee of VND4,900 each time of charging for motorbikes and VND19,900 for cars. The cost of battery charging in Southeast Asia is currently about VND8,000 per kWh.
According to calculation of some businesses, a 5-7 seater EV will consume 15kWh of electricity for 100km running. If one charging station each day serves 100 vehicles which need power for 200km, it can sell 3,000kWh of electricity. At a price of VND8,000 per kWh, one station can earn VND24 million, which will be VND720 million in one month, which means the profit of this business is huge. Even when one station could reach only 30-50% of the calculation, it will not suffer losses.
The businesses held that for users of EVs, the price of VND8,000 per kWh is still lower than the cost for petrol-fueled vehicle.
Recognising this potential, many businesses have designed plan to engage in this promising industry. The Vietnam Electricity is installing charging stations in Hanoi and some other localities. The industry has also drawn attention from many world leading firms such as Siemens and ABB.
