Investors Attracted to the Potential of EV Charging Stations

Investors Attracted to the Potential of EV Charging Stations

Last month, Chinese battery firm Gotion made a $150 million investment in Vietnamese electric vehicle (EV) manufacturer VinFast, acquiring 15 million ordinary shares, equivalent to 0.7% of VinFast’s total equity. Gotion is a collaborative partner with VinES Energy Solutions Corporation, an energy solutions provider under Vingroup, in a joint venture to manufacture lithium batteries in the Vung Ang Economic Zone in Ha Tinh province. This venture represents a significant investment of $275 million, with VinES holding a 49% stake and Gotion holding the remaining portion. The primary objective of the joint venture is to develop and produce rechargeable batteries for EVs and energy storage systems.

Apart from battery manufacturing, charging stations have emerged as a promising area of investment. Currently, VinFast and EVIDA are the main providers of electric vehicle battery charging station services in Vietnam. VinFast is developing charging stations with approximately 150,000 charge ports nationwide, offering a cost of 13 US cents per kWh. EVIDA, on the other hand, is developing public charging stations with a unit price of 38 cents per kWh, including an activation fee of 20-84 US cents.

According to Vu Tan Cong, Deputy Director General at Vietnam Automobile Industry and Trading Business Consultants, VinFast is currently compensating for the losses incurred by charging stations and plans to gradually increase prices in the near future. Assuming a charging fee of 34 US cents per kWh and 100 cars charged per day, the potential earnings would amount to $1,000 per day and over $30,000 per month.

Major enterprises such as ABB and Siemens have expressed their intentions to expand the electric charging station business market in Vietnam. ABB e-mobility, for instance, has supported Audi in rolling out its first electric car in Vietnam, offering diverse e-mobility solutions to meet varying EV charging requirements. Siemens, on the other hand, plans to provide Vietnamese customers with smart and flexible chargers suitable for various EV charging scenarios.

Experts suggest that investing in EV charging station networks should be prioritized early on, even before the widespread adoption of EVs. These investments can come from state-owned, private, and foreign-invested companies. In line with Vietnam’s action program for transitioning to green energy and reducing CO2 and methane emissions in the transport industry, the manufacturing and import of motor vehicles with traditional engines will be limited by 2040, with a complete phase-out by 2050.

BMI Research predicts that EV sales in Vietnam will double in 2023 compared to 2022, reaching approximately 18,000 units, with annual sales growth exceeding 25% over the next decade, equivalent to 65,000 units per year. The Vietnam Automobile Manufacturers Association estimates that the number of EVs in Vietnam will reach around one million units by 2030 and increase to 3.5 million units by 2040.

However, according to Cong, the current support and incentive policies for EVs are not strong enough to encourage widespread adoption, leading to hesitation in investing in the EV charging station network. Additionally, the national technical regulations on charging stations have not been published, causing uncertainty for investors on how to build and develop the EV network, resulting in wasted time.

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