E-bike brands forge new road trend

E-bike brands forge new road trend, photo: Duc Thanh

Mother of two in Hanoi, Nguyen Huong Lan, is excited by VinFast’s first electric motorbike. “If you’re a fan of eco-friendly transportation, then these roadworthy electric motorcycles are for you. I believe the electric motorbike will be widely used,” she said.

Her reasons for the praise include the “easy buy, easy ride” theme, and lack of fuel smell and fewer emissions.

Lan is not the only one enthused about the electric motorbike. It is predicted that the electric scooter and motorcycle market globally will hit 60 million unit shipments by 2024 – the equivalent of US$55 billion, according to market insights. It is safe to say that there is a lot of room for manufacturers to set their foot in the electric vehicle manufacturing industry in Vietnam.

New player

Doan Linh, CEO of manufacturer Pega, said that Vietnam has been slower than other countries in terms of electric vehicle development, and while the potential of the market is huge, Vietnamese enterprises have not paid sufficient attention to investment in recent years.

Indeed, Vietnam did not have any electric motorcycle manufacturing factories to speak of, until VinFast launched its first model in the northern city of Haiphong, and unveiled its electric motorcycle manufacturing factory, with the annual output of 250,000 bikes in the first phase, after more than a year of construction. The facility can churn out up to one million bikes a year.

“The participation of VinFast is expected to boost the domestic electric vehicle market, and create competition for gasoline scooters and bikes in the time to come,” said a motorcycle dealer on Nguyen Thai Hoc Street, Hanoi.

Research on the role of motorbikes in Vietnam conducted by Vu Anh Tuan from the Vietnamese-German Transportation Research Centre shows that motorbikes currently occupy the most significant position in transportation in the country. Moreover, beyond 2030 they will still be commonly used in spite of people’s increasing income.

Currently, the Vietnamese motorbike market is dominated by foreign players. Five members of the Vietnam Association of Motorcycle Manufacturers (VAMM) – namely Piaggio, Suzuki, SYM, Yamaha, and Honda – have reported sales this year higher than those of the previous year. The total number of motorbikes sold by these companies rose from over 2.8 million in 2015 to over 3.1 million in 2016, and to nearly 3.3 million in 2017.

According to a recent VAMM report, its members sold 783,940 motorbikes of all kinds in the second quarter of 2018, up 6.1% on-year, raising the total number in the first half of this year to nearly 1.6 million.

To prepare for the long term, VinFast and Vietnam Oil Corporation (PV Oil) signed a Memorandum of Understanding (MoU) on implementing charging stations and leasing batteries for electric vehicles.

The co-operation with PV Oil would be the beginning of VinFast’s plan to set up 30,000-50,000 charging stations and battery leasing terminals nationwide.

Under the MoU, PV Oil will provide 600 petrol stations nationwide for VinFast to install its charging station system in the first phase.

This will rise to 20,000 stations by 2020. Based on these locations, VinFast will be able to flexibly deploy models to meet the needs of customers in terms of electric power, including fast charging systems, battery rental and overnight charging stations.

In addition to identifying locations, VinFast is promoting the development of battery charging stations using advanced intelligent green power control technology. This system will allow the identification of vehicles and customers automatically, understanding habits to facilitate as well as taking care of customers effectively.

Customers can also pay for fast charging and battery charges with Vingroup’s loyalty card (VinID), as well as other payment methods.

Trends and market predictions

Electric two-wheelers, which include vehicles ranging from bicycles to scooters, are becoming increasingly popular and important forms of urban transport in Asian cities, particularly in China.

The potential environmental benefits to Asian cities of electric two-wheelers could be significant, especially if they replace gasoline scooters and motorcycles, according to an Asian Development Bank report on electric two-wheelers in India and Vietnam.

Electric scooters and motorcycles have been categorised into 48 volts (V), 24V, 36V, and are available in even more voltages like 60V and 72V. Speeds range from 30 to 70 kilometres per hour. All electric scooters and motorcycles can be recharged by plugging them into ordinary wall outlets, usually taking about eight hours to charge fully.

Vo Tri Thanh, former deputy director of the Central Institute for Economic Management, said that the increasing global release of carbon by burning fuel on roads has been a great concern for environmentalists and governments from the past decade. This concern has led to an increase in further demand for electric vehicles and their adoption worldwide.

According to Thanh, electric scooters and motorcycles, while reducing the carbon footprint on the environment, have gained significant interest from various governments as an efficient and reliable type of light motor vehicle.

To encourage the use of environmentally friendly vehicles with low emissions, benefits such as reduction in registration tax and other liabilities have been offered by governments of different countries.

“This factor is significantly responsible for the rise in the development and adoption of electric scooters and motorcycles in various countries,” Thanh said.

As per the findings of the research by Vu Anh Tuan, electric scooters were in higher demand than electric motorcycles. Sealed lead acid battery vehicles have been the largest revenue contributor in the global market.

However, lithium-ion battery-based scooters and motorcycles are expected to witness the highest growth in the demand during the forecast period.

China has been the largest market on the globe for these electric vehicles, while the Indian market is expected to witness the highest growth. Geographically, the Asia-Pacific region accounted for more than 90% of global electric scooter and motorcycle shipments in 2016.

The highest growth in shipments is expected in Europe during the forecast period. However, shipments in North America are also expected to grow at nearly the same rate.

The growth of the electric scooter and motorcycle market in the Asia-Pacific is due to rapid urbanisation and increase in household incomes, which is encouraging consumers to replace their fuel-driven two-wheelers with electric variants.

China, India, Indonesia, Japan, and the Republic of Korea are the major electric two-wheeler markets in the Asia-Pacific. Other major markets in the region include Australia and Vietnam.