The Electric Vehicle Transition as a Green Window of Opportunity? The Case of Vietnam

Mots-clés:

Résumé:

Purpose: Economic development scholars have proposed that environmentally sustainable industries such as renewable energies (biomass, hydro, solar, and wind power) are more strongly dependent on state intervention than normal industries, making these industries ideally suited to promote economic catch-up (Mazzucato and Perez 2015; Pegels and Altenburg 2020). Some recent studies have explored if electromobility can be understood as a Green Window of Opportunity (Lema, Fu, and Rabelotti 2020) for developing countries such as Brazil, India, and South Africa (Lema, Wuttke, and Konda 2024). This study explores the case of Vietnam, which differs from previously studied country cases in one important dimension, namely that it hosts a domestic producer, Vinfast, that seriously pursues electric vehicle (EV) production in order to compete in the global automotive market. Thus, the case of Vietnam allows us to investigate if electric vehicle production is an option for developing countries to catch-up in the global automotive industry.

Design: This study analyses secondary data based on an analytical framework proposed by Lema, Wuttke and Konda (2024) for the study of Green Windows of Opportunity in the automotive industry. This framework accounts for interactions between public policies and private sector actions, meaning that it not only analyses policy but also Vinfast strategy.

Findings: This study finds that Vinfast probably entered the race towards electric vehicles too late to utilise this Green Window of Opportunity for itself and for Vietnam. When Vinfast decided to only produce EVs in 2022, it lacked know-how and resources related to EVs and their production, particularly regarding EV batteries. While this is not unique to Vinfast, firms such as BYD or Tesla that currently seem to exploit the Green Window of Opportunity started significantly earlier and gradually developed EV-related capabilities. Further, Vietnam does fairly little to assist Vinfast’s intended exploitation of this Green Window of Opportunity, suggesting that developing country firms without significant government support will find it challenging to exploit electromobility as a catch-up opportunity in the global automotive industry.

Practical and theoretical implications: The practical implications highlight the still significant entry barriers to the automotive industry as well as the issue to not just start production but to attain profitability. While this may be not surprising to automotive industry scholars, it suggests that electric vehicles are not drastically changing the opportunities for catch-up in this industry. From a theoretical perspective such as Green Window of Opportunity, the case of Vietnam and Vinfast suggest that the window may already be closing and that private sector catch-up at least partially depends on supporting policies which in the case of Vietnam are not particularly strong.

References

Lema, R., Fu, X., and Rabellotti, R. (2020) ‘Green windows of opportunity: latecomer development in the age of transformation toward sustainability’, Industrial and Corporate Change, 29(5), 1193-1209.

Lema, R., Wuttke, T., and Konda, P. (2024) ‘The electric vehicle sector in Brazil, India, and South Africa: Are there green windows of opportunity?’, Industrial and Corporate Change, published online first. DOI: https://doi.org/10.1093/icc/dtae014

Mazzucato, M., and Perez, C. (2015) ‘Innovation as Growth Policy: The Challenge for Europe’, in Fagerberg, J., Laestadius, S., and Martin, B.R. (eds.) The Triple Challenge for Europe: Economic Development, Climate Change, and Governance. Oxford: Oxford University Press, pp. 229-264.

Pegels, A., and Altenburg, T. (2020) ‘Latecomer development in a “greening” world: Introduction to the Special Issue’, World Development 135, 105084.