The Vietnam battery market is expected to grow at a CAGR of more than 12% over the period of 2020-2025. Factors such as declining lithium-ion battery prices along with increasing demand for lead-acid batteries are expected to drive the Vietnam battery market during the forecast period. However, the country relies on pumped hydro storage rather than battery storage systems. This factor, in turn, is likely to hinder the growth of battery-based energy storage systems and the battery market in the coming years.

  • The lead-acid battery type is expected to dominate the market during the forecast period.
  • With the improvement in battery technology and the increasing importance of clean and green fuel, the automotive industry in Vietnam is expected to create more opportunities for lithium-ion batteries.



Key Market Trends

Lead-acid Battery to Dominate the Market

  • Vietnam’s annual gross domestic product (GDP) per capita growth has accelerated in 2018 to over 6.8% and is expected to continue at 6.5% for at least the next three years.
  • The country anticipates a significant boom in the passenger car market. Currently, car ownership is 23 cars per 1,000 people, compared to 204 cars per 1,000 people in neighboring Thailand, and 790 cars per 1,000 people in the US. It is expected that the country ownership of cars will grow to 50 per 1,000 people in the next few years, as a result of a rapidly growing middle-class economic condition, continued economic growth, and major investments in the national road infrastructure.
  • As of 2018, lead-acid battery types, such as valve-regulated lead-acid (VRLA) and flooded batteries, dominated the automotive market share in the country.
  • In March 2019, Leoch International Technology announced that it will be bringing two new lead-acid battery plants on stream this year in Vietnam. With the announcement of new plants, the company will be able to offer overseas customers the most cost-effective battery solutions by eliminating market uncertainties such as trade barriers and fluctuations of raw material prices.
  • Therefore, factors such as increasing demand from the automotive sector along with the plans to set up lead-acid battery manufacturing facilities in the country are expected to drive the lead-acid battery segment during the forecast period.



Electric Vehicles to Drive the Lithium-Ion Battery Market

  • The penetration of electric vehicles is anticipated to provide a massive impetus for the lithium-ion battery market’s growth. Adding to this, the declining lithium-ion battery prices is expected to drive both the EV and li-ion market in the country.
  • Vietnam currently imports its major share of lithium cells and batteries. In 2018, Vietnam imported around USD 34.479 million of lithium cells and batteries from outside the country. Hence, this is expected to be the major drawback for the growth of lithium-ion batteries in Vietnam, as the market is highly dependent on the supplier’s side.
  • On the other hand, the country is currently experiencing some investment in lithium-ion batteries. In April 2019, LG Chem Ltd. set up a joint venture with VinFast, Vietnam’s first automaker, to produce lithium-ion batteries for electric scooters and cars. Their joint venture will run a lithium-ion battery manufacturing factory, which is to be built in Vietnam’s northern port city of Hai Phong.
  • In May 2019, VinBus announce that it will be launching 3,000 electric buses in Vietnam. The transport service is expected to start from March 2020.
  • The rapid growth in solar PV and wind power capacity and generation has significant implications for the operability of the electricity system. This is expected to increase the demand for batteries in the country.



Competitive Landscape

The Vietnam battery market is consolidated. Some of the key players in this market include Vision Group, PINACO, GS Battery Vietnam Co. Ltd, HENG LI (VIETNAM) BATTERY TECHNOLOGY CO., LTD, and Leoch Battery Corporation.

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