The Electrification Race in Vietnam’s Taxi Industry

The taxi transportation sector in Vietnam is witnessing a strong wave of "electrification," bringing groundbreaking transformations with the participation of major players. This race shows no signs of slowing down.

The transition to electric vehicles not only offers clear economic and environmental benefits but also ushers in a new era for the taxi industry. Prominent names such as Mai Linh, Taxi 911, and Taxi 123 are actively advancing this strategy. Could this trend completely reshape Vietnam’s taxi transportation landscape in the coming years?

A Bold Electrification Strategy

Mai Linh Group, one of the most prominent brands in Vietnam’s transportation sector, has emerged as a pioneer in the “electrification” of its fleet. Beyond mere declarations, Mai Linh has executed a strategic partnership with Green and Smart Mobility Joint Stock Company (GSM) to integrate VinFast electric vehicles into its taxi fleet.

Specifically, Mai Linh aims to deploy 3,999 VinFast electric vehicles by the end of 2024, with a full transition planned within two years. This initiative is part of Mai Linh’s long-term strategy to optimize operating costs and reduce environmental impact.

Trần Minh, CEO of Mai Linh, stated: “We believe that electric vehicles will help reduce maintenance and fuel costs while providing customers with a green and clean transportation service. This is a strategic direction we have been planning for a long time, and now is the time to execute it.”

Mai Linh is not alone in this transition. Other major taxi companies in Vietnam are also joining the movement. Taxi 911 Group, a key competitor of Mai Linh, recently held a shareholder meeting and decided to integrate electric taxis into its fleet by the end of November 2024. The company has signed a lease-purchase agreement for 2,200 VinFast electric vehicles to develop its "911 Taxi" model, expected to launch later this year.

Similarly, other brands such as Taxi 123, An’s Garden, and Vinasun are equally committed to electrification. In November 2024, Taxi 123 signed a contract to purchase and lease 500 VinFast electric vehicles, with plans to expand operations in Hanoi and neighboring provinces such as Bắc Ninh and Vĩnh Phúc. The company aims to fully transition to electric vehicles within the next three years. This aggressive push by taxi operators is intensifying the electrification race. An’s Garden and Taxi Việt Đức have also signed agreements to lease and purchase VinFast electric vehicles in large numbers.

Not only major brands but also smaller taxi companies are experimenting with electric vehicles as part of their long-term strategies. They recognize that electric taxis are not just a trend but a competitive advantage, boosting customer trust and preference.

One of the key drivers behind this transition is cost savings. Electric vehicles have significantly lower maintenance and fuel costs compared to gasoline-powered cars, easing the financial burden on taxi operators in the long run. This is particularly crucial amid fluctuating fuel prices in recent years.

According to Trịnh Đặng Dũng, Chairman of the Board of Directors of Hoàng Minh Dũng Transport JSC, the company behind Taxi 123, maintenance costs alone for electric vehicles can be 30-40% lower than for traditional gasoline taxis. Additionally, electricity costs are much lower than fuel expenses, making electric taxis a more economically viable choice. This allows taxi companies to reduce fares, attract more customers, and enhance competitiveness in the market.

Moreover, the adoption of electric vehicles enhances brand value. Consumers are increasingly conscious of environmental factors and tend to favor green, sustainable services. Transitioning to electric taxis not only demonstrates a commitment to environmental protection but also builds a “green” corporate image, strengthening brand recognition.

Challenges to Overcome

While the electrification of taxis brings numerous benefits, the transition is not without challenges. The high initial investment required for purchasing electric vehicles and establishing charging infrastructure is a major hurdle. Experts note that a VinFast electric car costs 10-20% more than its gasoline counterpart, requiring taxi companies to carefully evaluate their financial strategies before making the switch.

Additionally, Vietnam’s electric charging infrastructure remains underdeveloped and unevenly distributed, particularly outside Hanoi and Ho Chi Minh City. Ensuring a well-integrated charging network that is convenient for both drivers and passengers remains a significant challenge for taxi operators.

Charging speed is another factor that needs improvement. Although charging times have significantly decreased in recent years, in emergency situations, prolonged charging periods could still pose an operational obstacle for taxi companies running 24/7 services.

To accelerate the electrification of the transport sector, the Vietnamese government has introduced several supportive policies, such as tax reductions and registration fee incentives for electric vehicles. These measures help ease the financial burden on businesses. The government also has plans to expand charging infrastructure and encourage the use of electric vehicles in public transportation.

Experts predict that within the next 5 to 10 years, electric vehicles will dominate Vietnam’s taxi industry—provided that these policies continue to be implemented and expanded.

With the rapid development of electric taxi fleets and strong government support, Vietnam’s taxi industry is poised for an electric vehicle boom. This shift is not only part of a global trend but also a crucial step in reducing pollution and moving toward a more sustainable future.

The electrification of Vietnam’s taxi sector will not only transform its image but also create significant growth opportunities in a promising market. With the commitment of businesses and strong backing from the government, Vietnam’s taxi industry is set to undergo a major transformation, positioning itself at the forefront of the global green mobility revolution.

(According to Doanh Nhan Sai Gon)

Source