Chinese electric vehicles are flooding into Vietnam.

Currently, there are more than 10 Chinese car brands operating in the Vietnamese market, including MG, Chery, Wuling, Hongqi, Haima, Haval, GAC, Aion, Omoda, Jaecoo, Lynk & Co…

Customers experience BYD electric vehicles from China in Ho Chi Minh City on the morning of July 18 - Photo: TTD

On July 18th, BYD announced the prices for its first three models in Vietnam. This Chinese electric vehicle manufacturer is the world leader in terms of scale and sales volume in 88 countries.

"I have been studying the Vietnamese market for over 10 years."

BYD launched three versions: Dolphin, Atto3 SUV, and Seal, priced at 659 million VND; 766-866 million VND; and 1.1-1.3 billion VND respectively. When the prices were announced, many people shook their heads, finding them quite high compared to gasoline and all-electric vehicles in the same segment from other manufacturers. Responding to questions about the high prices compared to the market, Mr. Liu Xue Liang, General Manager of BYD Auto Asia Pacific, stated that they had conducted research and gathered feedback from partners and customers over a long period. "We have carefully studied the Vietnamese market for over 10 years. Setting these prices in a market we consider a key area is a step that has been thoroughly researched," Mr. Liu said. BYD vehicles are priced lower in Thailand than in Vietnam, and many customers have compared the prices. For example, the Dolphin sells for 394 million VND in Thailand, while it costs 659 million VND in Vietnam. The Atto 3 SUV, priced at 563 million VND in Thailand, is being offered for 766 million VND in Vietnam. In reality, many Chinese brands are not cheap in Vietnam. The MG4EV and Haima 7X-E models distributed in Vietnam are priced higher than comparable gasoline and diesel models from Japanese and Korean brands in the same segment. Due to high prices and poor sales, the Haima 7X-E recently had its price reduced by 130 million VND to stimulate demand, but this still failed to attract customer interest.

Customers test drive BYD vehicles during the launch of the Chinese electric car brand in Thu Duc City on the morning of July 18th - Photo: TTD

No charging stations developed.

Many customers are also concerned about charging their Chinese-made cars. Mr. Vo Minh Luc, CEO of BYD, said that the company has no plans to build its own charging station infrastructure and will cooperate with other businesses or charge at the company's dealership network. In addition, customers can charge their cars themselves using portable chargers or 7kW wall chargers provided by the company. Customers also expressed concern that in large cities, most residents live in high-rise buildings and are unable to charge their cars themselves, while going to public charging stations involves long wait times and lacks flexibility for car owners. Driving to the provinces is even more difficult. "Traveling long distances without charging stations, relying only on a limited network of dealerships, will be even more difficult for users. Driving while constantly worrying about running out of battery is frustrating," said Mr. Quang Ha (Thu Duc City, Ho Chi Minh City). Mr. Ha believes that when buying a new electric car in the Vietnamese market, users will definitely choose a vehicle with good brand recognition, excellent service, and most importantly, convenience and ease of charging for long journeys. Mr. Nguyen Minh Dong, director of Duc Viet Technology Consulting Company, affirmed that charging stations are the backbone of the electric vehicle industry. The charging infrastructure is a crucial issue that needs to be addressed for electric vehicles to thrive. Meanwhile, VinFast currently holds the number one position with 150,000 charging ports nationwide. The company continues to invest billions of dong to expand charging stations across the country. According to Mr. Dong, this is a fundamental factor determining the success or failure of an electric vehicle brand. And even though electric cars from China may have better prices, the lack of charging stations will make customers hesitate. Previously, BYD announced it would spend approximately $250 million to build an electric vehicle assembly plant in Vietnam, hoping for favorable conditions for investment.

However, the company later changed course and invested in factories in Indonesia, Thailand, and Cambodia, then imported cars back to Vietnam for sale.

In response to questions about whether a car assembly and manufacturing plant will be built in Vietnam in the near future, Mr. Liu Xue Liang stated that this requires a long-term strategy and depends on future market realities.

VinFast electric vehicle charging station at Vincom Cong Hoa Shopping Mall, Tan Binh District, Ho Chi Minh City - Photo: QUANG DINH

Pressure from imported cars

Chinese electric vehicles are creating challenges and expectations in many markets. The expansion of Chinese electric vehicle manufacturers in Vietnam is occurring at a time of oversupply in China and the newly announced 100% tariffs in the US. Many countries have implemented measures to protect their domestic markets. This concern is justified, as BYD has an advantage over traditional automakers thanks to its vertically integrated supply chain. They manufacture almost all car parts themselves instead of outsourcing them to suppliers. Reducing battery costs – the most expensive component of electric vehicles – is key. The Vietnam Automobile Manufacturers Association (VAMA) believes that Chinese automakers could produce affordable electric vehicles for import and distribution in the Vietnamese market in the near future. Vietnam is a market with great potential, as the government 's roadmap to limit and eventually stop the production, assembly, and import of fossil fuel vehicles by 2040 will lead to a significant increase in demand for electric vehicles. Not only Chinese electric vehicles, but VAMA representatives also assess that the pressure from imported vehicles on domestically manufactured and assembled cars is increasing. Immediately after the removal of import tariffs on completely built cars from ASEAN in 2018, many domestically manufactured and assembled products could not compete with products from countries like Thailand and Indonesia. From 2025, when import tariffs on cars from the EU and the UK are reduced to 30-35%, the advantage for domestically manufactured and assembled cars will further diminish. Moreover, the influx of cheap electric cars from China is significantly impacting the production and business operations of domestic automotive companies. Mr. Nguyen Chi Sang, chairman of the Vietnam Association of Mechanical Enterprises (VAMI), said that some automotive companies with production facilities in Vietnam have already introduced electric and hybrid car models into the market and begun production and assembly in Vietnam. For example, Hyundai Thanh Cong Company with models like the Ioniq5 electric car and the Santa Fe hybrid. According to Mr. Sang, only by maintaining current production levels can automotive manufacturers continue to invest in expansion to produce more, especially green vehicle models in Vietnam, to create a wider variety of choices for consumers.

VinFast leverages its charging station advantage.

In response to the influx of Chinese electric vehicles, VinFast has launched a strategy offering customers who purchase VinFast cars between July 2024 and July 2026 free parking (for less than 5 hours), priority parking at locations within the Vingroup ecosystem, and free battery charging for one year. Notably, Vinhomes residents owning VinFast electric cars will also receive free parking and charging for two years at Vinhomes parking lots. Furthermore, Vingroup has established FGF - For a Green Future Company to buy, sell, and lease electric cars, contributing to stabilizing VinFast electric car prices and alleviating customer concerns about price depreciation.

China is the world's largest producer of electric vehicles.

In April, Omoda & Jaecoo Automobile Co., Ltd., a subsidiary of Chery Group (China), also signed a joint venture contract with Vietnam's Geleximco Group, investing $800 million in a car manufacturing plant in Thai Binh province. However, automotive industry experts believe that the trend for Chinese cars is now prioritizing the electric vehicle market. About 10 years ago, Chinese cars had no foothold in the global automotive market. As the global automotive industry entered a new chapter with the electrification race, Chinese cars transformed. China is now the world's largest producer and exporter of electric vehicles. According to the latest figures, in the first five months of 2024, BYD firmly maintained its position as the leading brand in terms of new energy vehicle sales globally with 1,191,478 vehicles, continuously breaking sales records. In June 2024 alone, BYD sold 341,658 vehicles, averaging 11,000 vehicles per day.

Customers are delaying, waiting for a discount.

Mr. Tran Thanh Nguyen (Binh Thanh District, Ho Chi Minh City) believes that Chinese car manufacturers "manipulate prices" for consumers when offering new models, then drastically reduce prices. Buying early means being ripped off, and the cars depreciate quickly. A recent example illustrates this, with Thai consumers expressing outrage over BYD's electric car price reductions being "too rapid and too drastic," leaving buyers feeling cheated. The Thai government has requested the Consumer Protection Commission to investigate BYD's recent price cuts on several car models. On electric vehicle forums in Vietnam, the BYD electric car story in Thailand has prompted many Vietnamese customers to express hesitation and delay purchases, waiting for further price reductions. The emergence of Chinese electric car brands, especially BYD, along with VinFast's aggressive strategy, is creating a vibrant picture for the automotive market.

The EU will impose new tariffs on electric vehicles from China.

An engineer works at the NIO electric vehicle manufacturing plant in Anhui province, China, on May 10, 2023 - Photo: AFP

Imports of electric vehicles from China to Europe began to increase in 2020, reaching over 57,000 units. Peaking in 2023, China's total global electric vehicle exports reached $34.1 billion, with Europe accounting for nearly 40%, approximately 437,000 vehicles. To curb this massive surge in electric vehicle imports from China, the European Commission (EC) announced a decision to impose new tariffs on these imports starting in July 2024. The new tariffs could reach 37.6% to offset the substantial subsidies provided by the Chinese government to its electric vehicle manufacturers. These subsidies allow Chinese electric vehicle manufacturers to sell their products at significantly lower prices in the European market, creating an unfair competitive advantage. The new tariffs will be based on the subsidies that the Chinese government provides to each electric vehicle manufacturer, according to the EC's investigation. The tariff for BYD is 17.4%, Geely 19.9%, and SAIC a higher 37.6%. Additionally, the tariff for some electric vehicle manufacturers that cooperated with the investigation is 20.8%, while those that did not cooperate face a rate of 37.6%. These tariffs are the result of the EC's anti-subsidy investigation into electric vehicle imports from China, announced by EC President Ursula von der Leyen in September 2023. The provisional tariffs came into effect on July 5th for a maximum of four months. During this time, EU members will vote to make a final decision, which will be valid for five years. But before that, the outcome depends on whether China proposes effective measures to address unfair competition and create a level playing field for electric vehicle manufacturers. China: Numerous policies encourage electric vehicle use . Starting in 2009, the Chinese government began providing financial subsidies to encourage electric vehicle manufacturers to produce electric buses, taxis, and cars for personal use. Thanks to these subsidies, electric vehicles have become more affordable for domestic consumers. According to MIT Technology Review, the Chinese government has invested over $29 billion in subsidies and tax incentives for the electric vehicle sector between 2009 and 2022, benefiting both businesses and consumers. Consumers receive a subsidy or incentive when purchasing electric vehicles, with the level of support varying depending on the type of vehicle. This policy has yielded considerable success, with China recording over 6 million electric vehicles sold domestically in 2022, accounting for more than half of global electric vehicle sales. Besides subsidies and tax incentives, China has also implemented several other policies to encourage the use of electric vehicles. In major cities like Beijing, people have to wait for years or spend thousands of dollars to obtain a license plate for gasoline-powered cars. However, this process has been streamlined for electric vehicles. Furthermore, the Chinese government has invested heavily in developing a network of public electric vehicle charging stations, ensuring easy access to charging stations nationwide for electric vehicle users. Some major cities have even launched special incentives such as free or reduced parking fees for electric vehicles. Source: https://tuoitre.vn/xe-dien-trung-quoc-tran-vao-viet-nam-20240719084937436.htm