Although still relatively new to the Vietnamese market, electric vehicles (EVs) have generated a lot of interest among locals, with about 70% of survey respondents saying they would be interested in buying an EV, whether fully electric or hybrid.

These findings are presented in KPMG Vietnam and Cho Tot Xe's report titled "Driven by Voltage: Navigating the EV Landscape."

Nguyen Tuan Hong Phuc, Partner and Head of Customer & Operations Consulting for KPMG in Vietnam and Cambodia, speaks at a related event in Ho Chi Minh City.

This report highlights the robust growth of both supply and demand in Vietnam's EV sector, which includes both two-wheel and four-wheel vehicles. Major players such as VinFast, Hyundai, Toyota, Kia, and BYD are entering the market, further fueling this expansion.

Government incentives to promote a green economy are another key factor driving the adoption of EVs. These policies are designed to create favorable conditions for the use of EVs, making them more accessible to consumers.

Key factors influencing EV purchase decisions

The report highlights several critical factors influencing consumers' decisions to purchase EVs.

Younger generations, particularly Gen Z and Millennials, show a strong inclination towards EV. This demographic increasingly values sustainable mobility options and high-tech solutions,  reflecting broader global trends.

Millennials, especially those between the ages of 35 and 44, value long-term value when choosing a vehicle. In addition to important features such as durability and comfort, they pay particular attention to resale value, even prioritizing it over after-sales service.

The expansion of widespread charging is critical to addressing consumer concerns and encouraging EV adoption. A reliable charging network is essential to accommodate the growing number of EVs on the road.

Companies must focus on improving the customer experience throughout the entire journey, from product research to purchase to post-sales support.

Investing in understanding customer behavior and providing effective communication, along with professional advisory teams and prompt support services, is critical to improving overall satisfaction, the report found.

"Vietnam's EV sector is booming thanks to supportive government policies, growing consumer interest and rapid technological advancements. This creates the perfect environment for new mobility ventures," said Nguyen Tuan Hong Phuc, Partner and Head of Customer & Operations Consulting at KPMG in Vietnam and Cambodia.

Based on a survey of over 1,000 participants and in-depth interviews with distributors and dealers, the report provides a comprehensive view of consumer behavior and trends influencing the EV market. Combined with KPMG's annual Global Automotive Executive Survey, it aims to provide executives with the essential insights needed to drive Vietnam towards a sustainable electric vehicle ecosystem.

Vietnam's potential as an EV manufacturing powerhouse

Delegates attending the KPMG Vietnam event.

Delegates attending the KPMG Vietnam event agreed that the country's automotive industry has experienced significant growth and development in recent years. Although it started later than neighboring countries such as Thailand and Indonesia, Vietnam is establishing itself as a formidable competitor in the automotive market.

Increased production capacity is a key factor contributing to Vietnam's potential in the electric vehicle market, which is evident in the production of both gasoline and electric models. The rise of electric vehicles represents a new chapter, allowing Vietnam to leverage its existing advantages, according to the delegates.

"Trade agreements between Vietnam and other countries also play an important role in boosting the country's EV industry. As one of the ASEAN countries with the largest number of free trade agreements (FTAs), Vietnam has access to advanced knowledge and technology. These agreements open up opportunities for cooperation with other EV markets, thereby enhancing Vietnam's capabilities," KPMG Vietnam said.

The report recommends that the creation of a favorable policy environment, including tax incentives, is essential to fostering growth in the electric vehicle sector. Such policies will encourage individuals and businesses to invest in EV technology and infrastructure, further driving the robust development of Vietnam's EV market.