Vietnam’s Battery Market Transformation - How PDP8, Lithium-Ion Manufacturing, and BESS Growth Are Positioning It as Asia’s Next EV Powerhouse

Vietnam’s battery market is no longer a quiet corner of Southeast Asia, it is rapidly becoming the engine room of the region’s electrification push. From electric vehicle (EV) rollouts to large-scale energy storage deployments under the Power Development Plan VIII (PDP8), the sector is witnessing unprecedented momentum. According to Makreo Research, between 2021 and 2024, the market expanded at a CAGR exceeding 5%, laying the groundwork for the next growth phase where domestic lithium-ion battery production and battery energy storage systems (BESS) are central to Vietnam’s strategic ambitions.

In 2025, focus has shifted to localized manufacturing, strategic joint ventures such as the VinES–Gotion partnership, and swappable battery models pioneered by Selex Motors. Coupled with strong government incentives, global OEM participation, and rising demand across transport, renewable energy, and industrial sectors, Vietnam is positioning itself not merely as a growth market but as a regional hub for battery innovation and manufacturing.

Battery Technology Landscape in Vietnam

Lead-Acid Batteries: Retaining Dominance in Automotive

Lead-acid batteries remain dominant in the motorcycle and automotive starter-light-ignition (SLI) segments. GS Battery Vietnam, jointly operated by GS-Yuasa and Mitsubishi, controls over 60% of the motorcycle battery market, supplying OEMs such as Honda, Yamaha, and Toyota.

Although lithium-ion is gradually displacing lead-acid in data center and UPS applications, lead-acid batteries remain cost-competitive in retrofit projects. This dual-track market reflects a cost-sensitive consumer base alongside premium segments transitioning to lithium-based solutions.

Dry Cell Batteries: A Price-Driven Segment Under Pressure

Dry cell batteries are widely used in household electronics such as toys, flashlights, and remote controls. Brands such as Con O and Eagle, produced by PINACO (Dry Cell & Storage Battery JSC), dominate this segment, with Con O holding more than 50% of the national market and 80% in southern Vietnam.

However, the segment is facing margin pressures and shifting consumer preference toward alkaline and rechargeable alternatives. PINACO is leveraging strong export channels and brand presence at consumer expos to capture growth opportunities abroad.

Government Policies Driving BESS Growth in Vietnam

Vietnam’s revised PDP8 has radically altered the trajectory of its energy storage sector. Earlier targets of just 300 MW of BESS capacity have now been elevated to 10,000–16,300 MW by 2030, underscoring the country’s ambition to integrate renewable energy at scale.

Renewable energy expansion targets:

• Onshore/Nearshore Wind: 26,066–38,029 MW by 2030

• Offshore Wind: 17,032 MW by 2035

• Solar: 46,459–73,416 MW by 2030

To support this expansion, Vietnam is strengthening regulatory and financial frameworks through the 2023 Just Energy Transition Partnership (JETP), tax incentives for solar-plus-storage projects, and investments in smart grid infrastructure. These measures are creating the conditions necessary to transform intent into large-scale implementation.

Battery Technologies Powering Vietnam’s BESS Growth

Lithium-ion batteries dominate BESS projects in Vietnam, with widely adopted cathode chemistries including LCO, LMO, LFP, NCA, and NMC, while graphite serves as the primary anode material. Other storage technologies—such as flow batteries, sodium-sulphur batteries, and lead-acid batteries—are deployed in niche applications, particularly for long-duration storage, high-energy density requirements, and off-grid or microgrid systems.

BESS installations require significant capital, with batteries themselves contributing nearly 40–60% of total project costs. Key balance-of-plant components include:

• Battery Management Systems (BMS)

• Power Conversion Systems (AC/DC)

• Energy Management Systems (EMS)

• HVAC and thermal regulation

• Transformers, switchgear, cabling, and protective equipment

These technological advancements, supported by government policies promoting renewable energy adoption, are enabling the integration of solar and wind power systems with energy storage. Vietnam is steadily moving toward a resilient, efficient, and sustainable energy future.

Key Market Drivers in Vietnam’s Battery Sector

• Policy Leverage: PDP8’s revision transforms BESS targets from 300 MW to 10–16.3 GW by 2030, unlocking significant investment opportunities.

• Industrial Clusters: Northern hubs such as Hanoi and Hai Phong account for 65% of electronics production. Samsung’s USD 850 million battery component facility has accelerated regional demand.

• Recycling & Circular Supply Chains: Partnerships like VinES with Li-Cycle and VinFast’s tie-up with India’s BatX Energies are reinforcing sustainable recycling and second-life battery applications, establishing Vietnam as a leader in circular battery ecosystems.

Vietnam Major Market Players & Strategic Developments

• VinES–Gotion JV: Operating a 5 GWh/year LFP plant in Ha Tinh, supporting VinFast’s EV ambitions and PDP8’s BESS objectives.

• PINACO (PAC): Vietnam’s leader in lead-acid batteries, adapting to serve e-mobility and industrial storage segments.

• Selex Motors: Developer of swappable battery systems, partnering with Be ride-hailing to electrify 3,000 drivers, signaling growth in energy-as-a-service models.

Strategic Partnerships and M&A

• VinFast–BatX Energies: Recycling high-voltage batteries to recover lithium, cobalt, and nickel, enhancing a circular economy while reducing import dependence.

• Glencore–Li-Cycle Deal (2025): Strengthens regional recycling capacity, critical for the EV and BESS value chain.

• FedEx Role in Lithium Battery Logistics: Enhancing safe transport solutions for lithium batteries (classified as Dangerous Goods), positioning Vietnam as a global exporter hub.

• Alternō Sand Battery Innovation: Domestic startup Alternō pioneers sand-based energy storage, securing global clients in Japan, Philippines, and Kenya, showcasing innovation beyond lithium.

Challenges Facing Vietnam’s Battery Industry

1. Supply Chain Dependence: Heavy reliance on imported lithium, cobalt, and nickel exposes manufacturers to price volatility and geopolitical risks.

2. Safety & Compliance Risks: Rapid ESS/BESS deployment is outpacing regulatory frameworks, raising concerns around thermal runaway prevention and standards compliance.

3. Missed Investment Opportunities: Inconsistent incentives have led to the loss of major foreign investments, e.g., Intel’s USD 3.3 billion project.

4. Policy Uncertainty: Sudden rollbacks of solar and wind incentives in early 2025 affected USD 13 billion worth of projects, deterring investor confidence.

Vietnam Battery Market: BESS, EVs & Innovation Outlook

Vietnam’s battery sector is transitioning from catching up to shaping Asia’s electrification journey. Over the next five years, the market is expected to see expanded lithium-ion production, utility-scale BESS integration, growth in swappable battery systems and energy-as-a-service models, and the development of circular recycling and second-life applications. Strategic alignment with EV adoption and PDP8 mandates will further strengthen Vietnam’s position, with key benchmarks including Ha Tinh’s VinES–Gotion hub, Selex’s swappable battery model, and innovators like Alternō.

Makreo Research’s Vietnam Battery Market Size and Forecast (2021–2030) provides a comprehensive assessment of this rapidly evolving industry, covering historical context, current performance, and key growth drivers such as rising battery demand across electric two-wheelers and the broader automotive segment, BESS adoption supporting renewable energy targets, and recent investment trends shaping the supply chain. The study also analyzes structural challenges and emerging opportunities, offering forward-looking insights to guide strategic planning, manufacturing expansion, and investment decisions, supporting sustainable and profitable growth across Vietnam’s battery ecosystem.

• Market Competition Overview

• Mergers, Acquisitions, and Strategic Investments

• Funding and Investment Timeline

• Company Profiles and Key Players

• Samsung SDI Vietnam Co., Ltd.

• Dry Cell and Storage Battery JSC (PINACO)

• Hanoi Battery Joint Stock Company (Habaco)

• Tia Sang Battery Joint Stock Company

• Heng Li (Vietnam) Battery Technology Co., Ltd.

There are 10 players covered in this report. To know more, please reach out to sales@makreo.com

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