Vietnam plans to convert 100 percent of its buses and taxis from petrol-powered to electric vehicles (EVs) within the next three decades to help with environmental protection.

Starting 2025, all replacement buses must be electric-powered as per a prime minister decision on green energy transition and carbon and methane emission reduction in the transport industry.

From 2030, all replacement taxis will have to be electric automobiles.

First electric taxi service

Green and Smart Mobility Joint Stock Company (GSM) -- the first taxi service supplier using electric cars in Vietnam -- launched its Green SM taxi service in Hanoi on April 14.

GSM CEO Nguyen Van Thanh said the company will operate the service in at least five major localities in Vietnam and it is in talks with a number of partners in Southeast Asia to expand its fleet to about 10,000 electric cabs. 

In the first phase of operation, Green SM will put 500 GreenCars and 100 LuxuryCars into service in Hanoi, using the VF 5 Plus model.

Thanh expects the introduction of Green SM will improve the service quality of the entire taxi industry, similar to the positive impact that the VinBus electric bus system has made in the public bus sector.

“We will raise the service quality to the highest level so that other firms will have to improve their service to compete,” said Thanh.

Thanh guaranteed that Green SM will offer competitive fares in the first years.

A GreenCar ride costs customers VND20,000 (US$0.85) for the first kilometer.

For the next 24 kilometers, the fare stands at VND14,000 ($0.6) per kilometer for the use of the VF 5 Plus car and VND15,500 ($0.7) per kilometer for the VF e34 vehicle.

The respective fares are VND12,000 ($0.51) and VND12,500 ($0.53) each kilometer for the rest of the drive.

The LuxuryCar service will charge customers a fixed VND21,000 ($0.9) a kilometer for the entire drive.

At the opening ceremony of Green SM on April 14, Nguyen Manh Quyen, deputy chairman of the People’s Committee of Hanoi, hailed the implementation of electric taxi services in Hanoi as contributing to fulfilling Vietnam’s commitment to reducing greenhouse gas emissions. 

“Electric taxis are one of the advanced solutions, bringing many benefits to the community, contributing to reducing air and noise pollution, while saving energy and reducing costs for users,” Quyen said.

Inevitable trend

Nguyen Cong Hung, chairman of the Hanoi Taxi Association, assessed that environmentally-friendly electric cars will become an inevitable trend, given the increasingly expensive petrol.

The Hanoi Taxi Association found in its research that electric cars both minimize the negative environmental impacts and have advantages over petrol and diesel cars regarding maintenance and engine noise.

Therefore, using electric cars will help taxi businesses save a large amount of operating cost.

However, there are two major barriers to the transition to electric taxis -- the lack of charging infrastructure and high investments. 

An electric taxi needs to be charged many times a day, considering its 24/7 operation, while the initial purchase cost is 1.5 to three times higher than a conventional car.

The association urged the government to create preferential mechanisms and policies to encourage the use of electric taxis.

Subsidy needed

A leader of Hanoi Transport Corporation (Transerco) said that replacing diesel buses with electric ones is not difficult, but budgets will be a major obstacle.

Currently, each bus in the VinBus fleet operating in Hanoi and Ho Chi Minh City costs about VND7 billion ($298,000). 

In its 10-year life cycle, the bus will need to have its battery replaced once, costing about VND2 billion ($85,143), increasing the total required budget to VND9 billion ($383,142) per bus. 

For comparison, a diesel bus with equivalent capacity costs just around VND3 billion ($127,714) for everything, including maintenance and repair expenses in the same 10-year life cycle.

Many countries around the world have subsidized car purchase prices for bus operators and bus manufacturers as buses remain a low-profit public utility service.

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