Vietnam News

Ho Chi Minh, Vietnam first city to carry out E-transportation development plan

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Ho Chi Minh City has been chosen as the first locality to carry out studies on the e-transportation development plan, given its huge potential. The Department of Transport made announced this at a recent meeting, with consulting units, which studied a transportation development plan involving e-vehicles in the southern hub.

The plan, part of the Nationally Determined Contributions project backed by the German government, aims to help Vietnam enhance capacity and legal frameworks facilitating transportation development in line with low-carbon solutions and greenhouse gas reduction.

A professor at the Hanoi University of Science and Technology, Dr Le Anh Tuan, who is also head of the consulting units, noted that Ho Chi Minh City’s land used for transportation stands at only 12.2%. And transport infrastructure development rate remains modest. Meanwhile, the number of vehicles has been on the rise, causing significant rises in environmental pollution. In addition to switching to e-vehicles, the city is advised to opt for waterway and railway transport and bolster electrification, a news report said. Tuan underlined that electricity infrastructure has an important role to play in the implementation of the e-transportation development plan. As Ho Chi Minh City is the first-ever locality to roll out the plan, it must be a priority in the national electric distribution planning, he stressed.

The Deputy Director of the Municipal Transport Department, Bui Hoa An, informed that Ho Chi Minh City is set to launch a new electric bus route by the end of the first quarter, to mitigate environmental pollution and improve passengers’ experience. The e-transportation development plan requires concerted efforts in infrastructure development, and he claimed that the Transport Department will continue to join hands with consulting units in building mechanisms and the final plan for the project.

According to a news report, Vietnam is expecting a new wave of electric vehicles in 2022. Under a decree recently issued by the government, battery-powered electric cars are to be exempt from the registration fee for three years, starting from 1 March. The fee shall be paid at a rate equal to 50% of the fee for petrol and diesel-fueled cars with the same number of seats over the next two years. The National Assembly also recently agreed to reduce the excise tax placed on electric cars in an attempt to encourage greater investment in battery-powered electric cars.

The government previously introduced a number of tax reduction preferences for assembling components and producing electric cars, although these policies were not viewed as attractive to manufacturers. The two preferential policies to take effect at the same time are anticipated to bring about a range of benefits to the newly-developed local electric vehicle market. It will also serve to help the domestic market catch up with the general trend of the auto industry, especially when the various battery-powered electric car industries of Vietnam and other ASEAN countries have almost identical starting points. Experts suggest that the government should focus on developing infrastructure for electric cars, such as establishing car charging stations or supporting the construction of battery factories to reduce vehicle costs.

By Samaya Dharmaraj – OpenGov Asia – January 22, 2022

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