Partner Hanoi
"VinFast is owned by Vingroup, Vietnam’s largest private corporate company, and has committed to developing its own electric vehicle for international export. VinFast’s recent listing on NASDAQ means electric vehicles now have a high profile in Vietnam."
To reach its net-zero emissions commitments by 2050, Vietnam will need to take action to cut down fossil fuel use in the transport sector. Promoting electric vehicles (“EVs”) is considered one of the key strategies for reducing greenhouse gas emissions. Decision 876/QD-TTg dated 22 July 2022 of the Prime Minister (“Decision 876”) sets out specific national objectives promoting the development of electric vehicles as follows:¹
- from 2022 to 2030: promoting the production, assembly, importation and conversion to EVs and developing e-charging infrastructure to meet the needs of both consumers and businesses; and
- from 2031 to 2050: ending the production, assembly and importation of fossil-fuelled road motorised vehicles for domestic consumption by 2040; and to have all motorised road vehicles fuelled by electricity and green energy and have developed the related e-charging infrastructure to do so by 2050.
Vietnam’s EV market is primarily composed of electric two-wheeler vehicles and passenger vehicles. Both offer substantial development opportunities given the government’s ambitious targets for phasing out fossil-fuelled road motorised vehicles. The government has initiated incentives for the production and importation of electric vehicles, beginning with a favourable excise tax rate for electric cars (ranging from 3%-15%), which is considerably lower than for fossil-fuelled cars (ranging from 35%-150%).²
E-charging infrastructure is still limited in Vietnam and no specific targets and incentives have been set by the government. Vinfast is currently the leading actor in e-charging infrastructure in Vietnam with more than 150,000 charging ports developed nationwide. Vinfast’s e-charging ports are placed in operating parking spaces such as car parks, coach stations, commercial centres, office and residential buildings and highway rest stops.³ These facilities are exclusively for Vinfast’s EV users and it has made it clear it will only consider sharing these facilities with other brands in 10 years’ time.⁴
VinFast is owned by Vingroup, Vietnam’s largest private corporate company, and has committed to developing its own electric vehicle for international export. VinFast’s recent listing on NASDAQ means electric vehicles now have a high profile in Vietnam.
Legal framework for the construction and operation of EV charging points
The legal framework for the construction and operation of EV charging points in Vietnam is underdeveloped. So far, there has not been any specific legislation passed relating to e-charging services nor any guidance on how best to invest in the sector. Therefore, e-charging projects will need to comply with existing investment, construction, fire safety and electricity supply regulations. The detailed procedure for developing projects may vary depending on the interpretation of existing legislation by the relevant authorities.
For developers planning to invest in EV charging points, the key legal considerations are set out below.
Planning and investment approval
For investors planning to build e-charging facilities, depending on the scale, location, and other characteristics of the project, applications for investment approvals from the relevant authorities may be required. In appraising an investor’s application, the authorities will examine, among other factors, the compatibility of the proposed investment project with relevant national, regional, and provincial master plans⁵ (e.g., land use and construction master plans). This assessment on compatibility with applicable master plans will vary depending on the authorities conducting the appraisal.
"The legal framework for the construction and operation of EV charging points in Vietnam is underdeveloped. So far, there has not been any specific legislation passed relating to e-charging services nor any guidance on how best to invest in the sector."
Construction permit
As a general principle, investors are required to obtain a construction permit before commencing construction, except in limited circumstances as specified under the Law on Construction.⁶ Where e-charging facilities are being installed on existing infrastructure, investors may request an exemption from requiring a construction permit if all the following conditions are met:⁷
- the installation does not affect the utilisation capacity of the existing infrastructure;
- the installation does not affect the safety of the load-bearing structure of the existing infrastructure; and
- the installation complies with the construction master plan and requirements on fire safety and environmental protection applicable to the existing infrastructure.
The assessment on eligibility for exemption from requiring a construction permit depends on the authorities administering the existing infrastructure.
Fire safety requirements
Vietnamese laws on fire safety do not include specific regulations regarding e-charging infrastructure. However, the Ministry of Public Security (“MPS”) provided guidance on fire safety requirements for e-charging stations in an official letter dated 9 August 2022, notably:⁸
- for e-charging stations installed within certain existing infrastructure including independent vehicle garages or garages contained within relevant properties or petrol stations, investors are required to apply to the competent authorities for conducting fire safety appraisals;
- where the installation of e-charging stations does not affect the fire safety of existing infrastructure (i.e., the installation does not result in a change to; (a) fire safety measures; (b) fire escape ways; or (c) fire alarms and extinguisher systems, investors will be exempted from conducting a fire safety appraisal. For installations within existing petrol stations, a fire safety appraisal is not required when the safety distance between the e-charging stations and existing infrastructure items have been satisfied; and
- for outdoor e-charging stations (except for those installed within petrol stations), fire safety appraisals are not required.
Whilst this guidance from the MPS have provided more clarity regarding fire safety regulations applications for e-charging infrastructure, it should be noted it has not been enacted into law. Since appraisals are conducted on a case-by-case basis, investors are advised to consult the relevant authorities to determine the conditions and criteria on fire safety appraisals applicable to their projects.
Electricity supply
So far, there is no specific regulation addressing electricity supply for e-charging stations. E-charging facilities bear the same retail electricity tariff as the infrastructure that they are attached to. However, in the current draft of the new government guidelines on retail electricity tariffs, a separate tariff has been proposed for e-charging stations.⁹ This proposed tariff is higher than the ones to be applied to residential households, administrative agencies, educational and health institutions, tourist accommodation and manufacturing plants, but lower than the one to be applied to all other business sites.¹⁰
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footnotes
[1] Article 1.I.3(a) of Decision 876
[2] Article 8, Law No. 03/2022/QH15 dated 11 January 2022 amending, supplementing certain provisions of several laws, including the Law on Excise Tax
[3] Source: Vinfast, E-car battery services: https://vinfastauto.com/vn_vi/dich-vu-pin-oto-dien
[4] Source: Viet Nam News, Viet Nam to face shortage of charging stations, published on 25 August 2023: https://vietnamnews.vn/economy/1582929/viet-nam-to-face-shortage-of-charging-stations.html#:~:text=The%20company%20has%20also%20made,of%20EVs%20in%20the%20US
[5] Article 33.3(a) and 38.2(b) of the Law on Investment No. 61/2020/QH14 dated 17 June 2020 (as amended)
[6] Article 89.1 of the Law on Construction No. 50/2014/QH13 dated 18 June 2014 (as amended) (“Law on Construction”)
[7] Article 89.2(d) of the Law on Construction
[8] Section 5.5, Annex I, Official Letter No. 2075/C07-P4 dated 9 August 2022 of the Ministry of Public Security
[9] Source: Electricity Regulatory Authority of Vietnam, Draft Government Decision on structure of retail electricity tariff, published on 6 July 2023: https://www.erav.vn/van-ban/du-thao-quyet-dinh-cua-ttcp-quy-dinh-co-cau-bieu-gia-ban-le-dien-8636.html (in Vietnamese)
[10] Annex of the Draft Government Decision on structure of retail electricity tariff published on 6 July 2023
