Competing ride-hailing services accelerate efforts in the eco-friendly transportation competition
In Southeast Asia, ride-hailing platforms are embracing electric vehicles (EVs) as part of a broader push for greener mobility. This shift is especially evident in Vietnam, where the government's supportive policies, growing market demand, and infrastructure development are driving the rapid growth of the EV market.
Market Growth and Government Policies
Vietnam's EV market is experiencing double-digit growth, with experts predicting that EVs will lead the automotive sector by 2025. The surge in electric vehicle sales, including those used by taxi and ride-hailing services, is backed by government mandates requiring 100% electric or clean-energy taxis in urban areas by 2030 (Decision 876/QD-TTg) and favourable policies promoting EV adoption. Public interest is also rising, as reflected in large-scale trade-in programs for petrol vehicles and expanding EV infrastructure.
Company Strategies
Companies like Green and Smart Mobility Joint Stock Co. (Green GSM) are leading the charge, operating fully electric fleets powered by domestic EV manufacturer VinFast. Green GSM has partnered with V-Green, Vietnam’s leading EV charging infrastructure provider, and other stakeholders to develop and expand EV infrastructure, facilitating broader EV adoption in ride-hailing networks. These moves demonstrate coordinated strategies involving fleet electrification and charging infrastructure expansion to ensure operational efficiency and sustainability.
Impact on Air Quality
The transition to EVs in ride-hailing fleets is reducing urban air pollution by cutting emissions from fossil fuel-powered vehicles. As urban taxi and ride-hailing fleets convert to electric power, this significantly lowers vehicular emissions, a critical contributor to air pollution in fast-growing Vietnamese cities. Government policies aiming for 100% EV adoption in urban taxis by 2030 could substantially improve air quality, gas emissions levels, and public health over time.
Future Plans and Partnerships
The Ho Chi Minh City Institute for Development Studies (HIDS) has proposed supporting the city's net-zero emissions and transport electrification ambition, with a plan to roll out the conversion from 2026 for ride-hailing platforms in Ho Chi Minh City. Attractive incentives are proposed to encourage drivers to shift to EVs. Meanwhile, Hanoi's plan to ban fossil-fuelled motorbikes within its inner Ring Road 1 starting July 2026 could boost demand for electric motorbikes, although concerns remain around charging infrastructure and the need for a broader product range.
The regional partnership between Grab and BYD, signed in January, allows Grab drivers across Southeast Asia to purchase 50,000 BYD EVs at the best price. The EV segment is set to lead the expansion in Vietnam's ride-hailing market, with a compound annual growth rate of around 45 per cent between 2024 and 2029. Vingroup has already launched an electric taxi service in Indonesia, leveraging its advantage as an EV manufacturer to expand its presence in Southeast Asia. GoJek plans to convert its entire two-wheeler fleet to electric motorcycles by 2030 and has established a joint venture to manufacture them.
Economic Benefits
Electricity costs around 80% less per kilometer than petrol, and EVs require less maintenance, potentially saving a ride-hailing driver $40-50 per month on average. The regional partnership between Grab and BYD also offers promotions such as a guaranteed income of up to $1,000 per month for GrabCar Plus drivers and an eight-year or 500,000-km battery warranty.
In conclusion, Vietnam's ride-hailing companies are integral to the country’s electric vehicle ecosystem by committing to fully electric fleets, leveraging robust government policies, and collaborating on infrastructure development. These efforts underpin rapid market growth and promise positive environmental outcomes in air quality for urban centers.
- Aside from Vietnam, Southeast Asian ride-hailing platforms are also embracing electric vehicles as part of a broader push for greener mobility.
- The rise in investments in renewable energy and environmental-science sectors indicates a growing interest in financing sustainable solutions.
- The growing market demand and infrastructure development in the EV sector are fueling the expansion of the automotive industry in Southeast Asia.
- Fintech companies are increasingly offering personal-finance solutions tailored to electric vehicle purchases and charging infrastructure investments.
- Real-estate developers are rethinking urban planning to accommodate growing public-transit systems, cycling lanes, and EV charging stations, following technological advancements in transportation.
- Investing in electric vehicles can provide significant long-term benefits, considering the lower costs of electricity compared to petrol and reduced maintenance expenses.
- Recognizing the shift toward EVs, automotive businesses are diversifying their product lines to include electric cars and motorcycles, catering to a more sustainable lifestyle.
- As cities aim for net-zero emissions, partnerships between ride-hailing companies and EV manufacturers are offering attractive incentives to encourage vehicle electrification in the transportation sector.
- The adoption of electric vehicles in the ride-hailing industry is expected to have a positive impact on climate-change mitigation efforts, as fewer fossil fuel-powered vehicles would contribute to reduced carbon emissions.
