Green transportation paves path to net zero

May 24, 2024 | 09:50
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Environmental, social, and governance (ESG) responsibilities create competitive advantages and a sustainable development path for business as Vietnam aims to electrify 50 per cent of its public transport by 2030 and 100 per cent by 2050.

This message was shared by Nguyen Van Thanh, global CEO of GSM, at the "ESG – Motivations and Breakthroughs" conference organised by VIR in collaboration with WBS Solutions and Systems on May 23.

Green transportation paves path to net zero

Global manufacturers are churning out electric vehicles (EVs) and providing electric transportation services. Examples include Ola, DLu, and Uber in India, Kakao Mobility in South Korea, Bluebird in Indonesia, and Didi and T3 in China.

Vietnam ranks 36th out of 117 countries in terms of pollution, with the transportation sector being the largest emitter. The government has committed to achieving net-zero emissions by 2050, which is driving the development of green enterprises like Xanh SM.

"From the outset, GSM positioned its brand to lead the green transportation sector, aligning with global trends and the Vietnamese government’s commitment to net-zero emissions by 2050 made at COP26. Xanh SM aims to create significant value for customers and partners. After one year, Xanh SM has over 33 partners and 50,000 EVs in 40 cities and provinces, reducing more than 52,000 tonnes of CO2," said GSM's CEO.

Xanh SM is the first platform in Vietnam to offer a 100 per cent electric fleet, and is striving to expand nationwide. The company plans to operate in 60-63 cities and provinces by 2024, contributing to a reduction of over 52,000 tonnes of CO2, equivalent to the photosynthesis absorption of 2.6 million trees over one year.

The transportation market, valued at $1.4 billion in 2023, is growing at an annual rate of 14-21 per cent, with substantial growth potential. The ride-hailing sector in Vietnam is expected to continue growing significantly over the next 20 years.

"We have initiated a new ESG business model in Vietnam and expanded it globally. Xanh SM aims to be present in seven countries. We have launched in Laos and are preparing to enter Indonesia in 2024. Xanh SM is the only pure electric platform provider in Vietnam with an international presence," said Thanh.

"Using EVs optimises costs for users. Cost is a key concern for businesses due to volatile fuel prices and high maintenance expenses. EVs, however, offer lower input costs as electricity is more stable and cheaper per kilometre than petrol, and maintenance costs are also lower," Thanh explained.

Vietnamese consumers prioritise environmentally friendly products, and Xanh SM has gained strong support for this reason. Despite being a new startup, Xanh SM served 50 million customers in its first year and is frequently the most downloaded app on the Apple Store and Google Play.

A distinguishing feature of Xanh SM is that its drivers are employees, not partners, ensuring rigorous training and service quality control. Xanh SM’s services exceed average standards, particularly in tourist provinces, earning high praise from international visitors and adding value to the community.

To achieve long-term success, the CEO emphasised the importance of collaboration, saying, "We must work together with the community, including transportation businesses and individuals."

Xanh SM collaborates with transportation businesses, currently partnering with 33 entities, to engage in ESG. In its first 12 months, Xanh SM averaged 2-3 new partners per month and aims to have 70-80 partners by the end of 2024. These partners are committed to deploying over 10,000 electric motorbikes and cars for their services, potentially expanding the model.

The company also works with individual partners, prioritising the adoption of EVs. "The business community is our left hand, and individuals are our right hand. Everyone can be a green ambassador," Thanh added.

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By Hazy Tran

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