Opportunities for international electric vehicle companies to enter Vietnam’s market: The case of Tesla

Abstract

In Vietnam, buying a car has long been seen as a significant investment. More Vietnamese are able to afford such vehicles now that their purchasing power has increased as a result of economic growth. Vietnam's automotive market is presently one of Southeast Asia's fastest-growing. Ho Chi Minh City and Hanoi have frequently been among the most polluted cities in the world. Vietnam was ranked as the 15th most polluted nation in the world in an IQAir survey. As governments turn to sustainable energy and take environmental concerns into account, electric vehicles are on an unstoppable trend and will be the norm in the future. This implies that interested investors may lay the foundation for this future transition by setting up industrial facilities, supply systems, and human resources. The attractiveness of the Vietnam market and potential entry points for foreign electric car manufacturers will be examined in this study using a variety of methodologies to conclude on opportunities for international electric vehicle companies to enter this market. After considering a number of variables, including Vietnam's culture, resources, risk, ease of doing business, and 5-force analysis of the country's electric vehicle industry, we come to the conclusion that the market is moderately attractive and that there is a favorable political environment for investments. Acquisitions and wholly-owned subsidiaries are the most appropriate entry modes for multinational electric automakers to enter the Vietnamese market. Conducting SWOT and criteria-based analysis specifically results in wholly-owned affiliate as the best way for Tesla, Inc. to enter this market. This study findings can be used as reference not only for electric automakers but also to many other potential investors. The results of this study is subjected to the limitations of time constraints and constantly changing country situation so they should be interpreted with reference to other research and the current condition of the country. Further research could be conducted in more details for a particular foreign electric vehicle company to enter Vietnam market.