E-bike brands forge new road trend

November 20, 2018 | 14:00
The launch of VinFast’s electric motorbike models during the recent opening ceremony of its manufacturing factory is expected to create bigger competition in Vietnam’s lucrative motorbike market currently dominated by Honda, Yamaha, and Piaggio’s gasoline two-wheelers. Thu Oanh reports.
e bike brands forge new road trend
E-bike brands forge new road trend, photo: Duc Thanh

Mother of two in Hanoi, Nguyen Huong Lan, is excited by VinFast’s first electric motorbike. “If you’re a fan of eco-friendly transportation, then these roadworthy electric motorcycles are for you. I believe the electric motorbike will be widely used,” she said.

Her reasons for the praise include the “easy buy, easy ride” theme, and lack of fuel smell and fewer emissions.

Lan is not the only one enthused about the electric motorbike. It is predicted that the electric scooter and motorcycle market globally will hit 60 million unit shipments by 2024 – the equivalent of $55 billion, according to market insights. It is safe to say that there is a lot of room for manufacturers to set their foot in the electric vehicle manufacturing industry in Vietnam.

NEW PLAYER

Doan Linh, CEO of manufacturer Pega, said that Vietnam has been slower than other countries in terms of electric vehicle development, and while the potential of the market is huge, Vietnamese enterprises have not paid sufficient attention to investment in recent years.

Indeed, Vietnam did not have any electric motorcycle manufacturing factories to speak of, until VinFast launched its first model in the northern city of Haiphong, and unveiled its electric motorcycle manufacturing factory, with the annual output of 250,000 bikes in the first phase, after more than a year of construction. The facility can churn out up to one million bikes a year.

“The participation of VinFast is expected to boost the domestic electric vehicle market, and create competition for gasoline scooters and bikes in the time to come,” said a motorcycle dealer on Nguyen Thai Hoc Street, Hanoi.

Research on the role of motorbikes in Vietnam conducted by Vu Anh Tuan from the Vietnamese-German Transportation Research Centre shows that motorbikes currently occupy the most significant position in transportation in the country. Moreover, beyond 2030 they will still be commonly used in spite of people’s increasing income.

Currently, the Vietnamese motorbike market is dominated by foreign players. Five members of the Vietnam Association of Motorcycle Manufacturers (VAMM) – namely Piaggio, Suzuki, SYM, Yamaha, and Honda – have reported sales this year higher than those of the previous year. The total number of motorbikes sold by these companies rose from over 2.8 million in 2015 to over 3.1 million in 2016, and to nearly 3.3 million in 2017. According to a recent VAMM report, its members sold 783,940 motorbikes of all kinds in the second quarter of 2018, up 6.1 per cent on-year, raising the total number in the first half of this year to nearly 1.6 million.

To prepare for the long term, VinFast and Vietnam Oil Corporation (PV Oil) signed a Memorandum of Understanding (MoU) on implementing charging stations and leasing batteries for electric vehicles. The co-operation with PV Oil would be the beginning of VinFast’s plan to set up 30,000-50,000 charging stations and battery leasing terminals nationwide.

Under the MoU, PV Oil will provide 600 petrol stations nationwide for VinFast to install its charging station system in the first phase. This will rise to 20,000 stations by 2020. Based on these locations, VinFast will be able to flexibly deploy models to meet the needs of customers in terms of electric power, including fast charging systems, battery rental and overnight charging stations.

In addition to identifying locations, VinFast is promoting the development of battery charging stations using advanced intelligent green power control technology. This system will allow the identification of vehicles and customers automatically, understanding habits to facilitate as well as taking care of customers effectively.

Customers can also pay for fast charging and battery charges with Vingroup’s loyalty card (VinID), as well as other payment methods.

TRENDS AND MARKET PREDICTIONS

Electric two-wheelers, which include vehicles ranging from bicycles to scooters, are becoming increasingly popular and important forms of urban transport in Asian cities, particularly in China. The potential environmental benefits to Asian cities of electric two-wheelers could be significant, especially if they replace gasoline scooters and motorcycles, according to an Asian Development Bank report on electric two-wheelers in India and Vietnam.

Electric scooters and motorcycles have been categorised into 48 volts (V), 24V, 36V, and are available in even more voltages like 60V and 72V. Speeds range from 30 to 70 kilometres per hour. All electric scooters and motorcycles can be recharged by plugging them into ordinary wall outlets, usually taking about eight hours to charge fully.

Vo Tri Thanh, former deputy director of the Central Institute for Economic Management, said that the increasing global release of carbon by burning fuel on roads has been a great concern for environmentalists and governments from the past decade. This concern has led to an increase in further demand for electric vehicles and their adoption worldwide.

According to Thanh, electric scooters and motorcycles, while reducing the carbon footprint on the environment, have gained significant interest from various governments as an efficient and reliable type of light motor vehicle.

To encourage the use of environmentally friendly vehicles with low emissions, benefits such as reduction in registration tax and other liabilities have been offered by governments of different countries.

“This factor is significantly responsible for the rise in the development and adoption of electric scooters and motorcycles in various countries,” Thanh said.

As per the findings of the research by Vu Anh Tuan, electric scooters were in higher demand than electric motorcycles. Sealed lead acid battery vehicles have been the largest revenue contributor in the global market.

However, lithium-ion battery-based scooters and motorcycles are expected to witness the highest growth in the demand during the forecast period. China has been the largest market on the globe for these electric vehicles, while the Indian market is expected to witness the highest growth. Geographically, the Asia-Pacific region accounted for more than 90 per cent of global electric scooter and motorcycle shipments in 2016. The highest growth in shipments is expected in Europe during the forecast period. However, shipments in North America are also expected to grow at nearly the same rate.

The growth of the electric scooter and motorcycle market in the Asia-Pacific is due to rapid urbanisation and increase in household incomes, which is encouraging consumers to replace their fuel-driven two-wheelers with electric variants. China, India, Indonesia, Japan, and South Korea are the major electric two-wheeler markets in the Asia-Pacific. Other major markets in the region include Australia and Vietnam.

Reshaping travel trends

The fresh launch of electric motorbikes from VinFast raises issues for manufacturers at home, importers of Chinese motorbikes, and even combustion-engine vehicle producers. Vu Tan Cong, deputy general director of Vietnam Car Business and Industry Consultant Co. Ltd., talked with VIR’s Nguyen Huong about this issue and his analysis on the market.

e bike brands forge new road trend

How does the launch of VinFast’s electric motorcycle affect the wider ­market in general, in your opinion?

There are currently ­motorbikes with three types of engines: gasoline internal combustion engines, pure electric motors and a hybrid engine. In internal combustion engine-equipped motorcycle segmentation, Honda-brand bikes had 72 per cent of the market share during 2017, and 74 per cent during the nine first months of 2018. Following that are four other members of the Vietnam Association of Motorcycle Manufacturers: Yamaha, Suzuki, Piaggio and SYM. Recently, Honda has launched its own hybrid bike with the PCX Hybrid model. Over the past years, imported Chinese-produced products have also been marketed in Vietnam.

Electric bikes imported from China are new N1 models fitted with Bosch technology and Panasonic batteries and go on sale for between VND35-45 million ($1,521-1,950). The maximum travel distances after one charging are 50 kilometres and 100km, whilst the top speeds are 40km per hour and 50km per hour respectively.

Locally-produced electric vehicles include the Pega Aura which has a stylish design similar to the Vespa and is fitted with Bosch technology. These vehicles are more interesting to consumers than the new N1 thanks to their low selling prices at only VND14.5 million ($630), with the same capacity as the Chinese models.

VinFast’s electric motorbikes use Bosch technology. The maximum travel distance after one charge is 80km and has a top speed of 50km per hour. The selling price of the first batch is VND21 million ($913) for the lead-acid type and VND35 million ($1,521) for the lithium-ion battery version. These prices are valid during the VinFast’s Three-Zero policy. After that expires, prices will likely be raised.

The biggest advantage of the bikes is the reduction in environmental pollution and the removal of the gasoline smell when vehicles are stored in the home. Disadvantages include limited travel distances after one charging, long charging times of five or seven hours, and very high costs for end-of-life batteries. In line with the current regulations, the manufacturers are responsible for the retrieval and treatment of end-of-life batteries.

Through a study on the motorcycle market, consumers buy based on three factors: convenience, brand and price. Regarding their convenience, electric bikes are considered inconvenient compared with gasoline engines. Upon the launch of VinFast’s pure electric motorcycles, there will be some changes throughout the Vietnamese market. Chinese-produced motorcycles that have been imported will lose much of their customer base to VinFast. Thanks to more competitive prices than VinFast, the sales of locally-produced Pega Aura electric motorcycles will be stable. Other giants such as Honda, Yamaha, and Piaggio, which have yet to sell any electric motorbikes in Vietnam and whose scooters have internal combustion engines, will suffer. The impact from the launch of VinFast’s products will be felt across the entire market in time.

Will electric motorcycles be increasingly developed in the near future?

Like automobiles, the development of pure electric motorcycles will also be a trend in the future. However, over the next five to 10 years, it may be impossible for them to replace motorised bikes entirely thanks to their convenience and the current disadvantages of pure electric bike products. Only when electric bikes can travel long distances, say between 150 and 200km, after one charging, will electric motorcycles overtake bikes with an internal combustion engine. It should be noted that, in mountainous areas and regions with hills and poor road conditions, it will be impossible for pure electric vehicles to replace motorcycles with an internal combustion engine.

However, Vietnam is now planning to reduce the use of personal vehicles. Thus, do you think that the development of electric vehicles will conflict with this policy?

The policy on the personal means-of-transport limitation in big cities such as Hanoi and Ho Chi Minh, affecting automobiles and motorcycles, are aimed to reduce traffic jams in major cities. Jams are caused by four main reasons: Dis-obeying of traffic laws, organisation of traffic, road infrastructure and the number of vehicles on the road. When public transport services in large cities are both efficiently organised and convenient to people, the personal means-of-transport will be automatically reduced. In other words, the domination of pure electric motorcycles will not conflict with the policy on the personal means-of-transport limitation.

What are your assessments on Vietnam’s current traffic infrastructure if these motorcycles become more popular in the future?

As previously said, traffic infrastructure is one of four causes of congestion in big cities. At present, it remains insufficient and very poor. The development of motorcycles in the future, both pure electric motors and internal combustion engines, will raise pressure on the traffic infrastructure in major cities. The development and upgrading of existing traffic infrastructure in these large cities is getting more and more necessary and urgent.

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