VinBus Ecology Transport Services Company (VinBus), a subsidiary of major Vietnamese conglomerate Vingroup, will likely halt its electric bus service in Ho Chi Minh City by the end of this year due to a low subsidy.

The city planned to pilot five e-bus routes within 24 months, with the first one, numbered D4, starting at Vinhomes Grand Park in Thu Duc City and ending at Saigon Bus Station in District 1 launched in March last year.

The service has attracted many local commuters thanks to modern facilities, according to the Ho Chi Minh City Department of Transport's report sent to the municipal administration.

In January-September this year, more than 28,800 rides were conducted on the D4 route, transporting some 819,900 passengers.

However, VinBus’ revenue was not enough to cover costs despite an increase in the number of passengers.

The company reported that the subsidy for the D4 route was low, at 44.1 percent of the operation costs, equivalent to two-thirds of that for diesel oil- and compressed natural gas-fueled buses.

This has led to VinBus’ huge losses. It incurred a deficit of VND16.1 billion (US$661,880) last year and VND12.5 billion ($513,547) in the January-August period this year.

As a result, the company proposed adjusting the subsidy for e-buses to 64.8 percent, equal to the average subsidy for normal bus routes in 2023.

VinBus will find it hard to launch four other e-bus routes and seek to cease the D4 route from the end of this year if the proposal is not approved.

The Department of Transport also attributed the delay in launching the four remaining e-bus routes to the time-consuming procedures for VinBus’s depot project.

The firm drew up a plan to develop a depot with an area of 1.5 to two hectares in Thu Duc with sufficient facilities, such as offices, a bus maintenance and repair workshop, a charging station, and a parking area.

However, legal procedures for the project are complicated and require the involvement of various departments and agencies.

Amendments to policies for the construction sector have also hindered the progress of the project.

VinBus has a plan to open the four remaining routes if the subsidy increases, specifically in May and June next year.

The Ho Chi Minh City Department of Transport proposed the municipal administration approve the subsidy rise to 64.8 percent for five e-bus routes this year to remove the service provider’s difficulties and encourage public transport enterprises to use eco-friendly vehicles.

The Department of Transport of Hanoi has requested VinBus to operate nine e-bus routes in the capital city, offering an average subsidy of 80 percent, according to VinBus.

D4 e-buses have modern equipment, such as free Wi-Fi, phone charging ports, monitors, and a floor which is low and can be adjusted to serve the disabled.

The service is available from 5:00 am to 9:15 pm on a daily basis, with each trip starting every 20 minutes.

The service provider has developed a mobile app to help commuters get updates on incidents on the route, such as congested sites or buses’ late arrival.

The company also established a customer service unit which works around the clock.

Quarterly surveys on passengers’ satisfaction with the e-bus route showed that the service got 89-95 points out of the maximum 100 points.

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