99.9% of Vietnam's EVs are homegrown — and emerging-market brands are raising the stakes

As engines and transmissions disappear from vehicles, the auto industry's once-formidable barriers to entry are falling. In Vietnam, homegrown brand VinFast has captured 99.9 percent of the electric vehicle market, while Saudi Arabia, Mexico, Brazil and others are nurturing their own EV brands. Should these emerging-market players launch a low-price offensive, the competitive pressure on established automakers is expected to intensify.

According to a report on emerging-market EV brand development published Monday by the Korea Automobile Research Institute, VinFast held a 99.9 percent share of Vietnam's domestic EV market last year. Turkey's Togg claimed 19.4 percent of its home EV market in the same period, and Saudi Arabia, Mexico, Brazil and Morocco are all preparing to begin mass production of their own brands.

Emerging economies see EVs as a new industrial opportunity because the competitive dynamics of the auto sector have fundamentally shifted. A conventional internal-combustion vehicle requires roughly 30,000 components, including an engine and transmission, while an electric vehicle is estimated to need only about 12,000. As critical technologies have migrated from engines to batteries, electronics and software, the technological barriers that established automakers spent decades building have partly eroded.

Vietnam offers the most advanced example. VinFast originally produced internal-combustion vehicles before pivoting to become an EV-focused manufacturer, backed by funding from its parent company Vingroup and supportive government policy. Domestic VinFast EV sales roughly doubled from 87,000 units in 2024 to 175,000 last year.

A Vingroup affiliate has also locked up the charging infrastructure. V-Green, a Vingroup subsidiary, held about 85 percent of Vietnam's EV charging market as of 2024 and provides charging services centered on VinFast vehicles. The Vietnamese government supports the brand by exempting first-time EV registrations from registration tax and reducing special consumption tax, while simultaneously imposing a 70 percent tariff on imported EVs under most-favored-nation terms.

Saudi Arabia is building its own EV ecosystem through its sovereign wealth fund, the Public Investment Fund. In 2022, the PIF teamed up with Taiwan's Foxconn to establish the EV brand Ceer. Ceer is constructing an integrated production complex in King Abdullah Economic City, targeting the start of production of its first SUV and sedan in the fourth quarter of this year.

The strategy extends beyond finished vehicles to encompass the entire supply chain, including workers and components. The PIF is involved in establishing an automotive workforce training institution and component manufacturing joint ventures, and has set up a local tire production subsidiary with Pirelli. The broader vision is to build a supply chain running from raw materials to components to finished vehicles, drawing on petrochemical feedstocks produced in Saudi Arabia.

In Latin America, the development of low-cost EVs tailored to local conditions stands out. Olinia, a brand led by the Mexican government, is pursuing production of electric vehicles priced between 90,000 and 150,000 pesos (about $8,870), and has designed them to charge from standard household 110V and 220V outlets, accounting for the country's limited charging infrastructure.

Brazilian startup Recar is developing an extended-range electric vehicle that can run on ethanol, a fuel widely used in the country. As of 2024, about 85 percent of passenger cars in Brazil are flex-fuel vehicles capable of running on both gasoline and ethanol.

Some countries are leveraging existing auto manufacturing bases to build their own brands. Turkey, the fifth-largest vehicle producer in Europe, hosts production facilities for 13 global automakers. Its homegrown brand Togg sold 39,000 EVs last year, overtaking Tesla and BYD to claim the top spot in domestic EV sales.

Togg is also rapidly increasing its use of locally sourced components. Its localization rate rose from 51 percent in 2023 to about 75 percent last year. The company has established a joint venture with Chinese battery maker Farasis Energy to produce battery packs and modules domestically.

The Korea Automobile Research Institute said the spread of these emerging-market brands could intensify price competition in the EV sector, as lower labor costs and government subsidies would allow them to supply low-cost electric vehicles at scale.

Trade barriers designed to protect domestic industries could also rise. Turkey has imposed an additional 30 percent tariff on vehicles imported from countries outside the EU and free trade agreement partners since September last year, pushing its total tariff rate to 40 percent.

However, emerging markets have clear weaknesses. Even after securing a domestic vehicle manufacturing base, internalizing supply chains for critical components such as batteries in a short time frame remains difficult, and many countries' charging infrastructure and power grids cannot keep pace with the speed of EV adoption.

This gap could represent a new opportunity for South Korean parts suppliers. Because emerging-market automakers still lack mass production experience and a solid component procurement base, Korean companies have room to enter new supply chains — not only in batteries and automotive electronics, but also in charging infrastructure.

Jung Jun-ha, a senior researcher at the Korea Automobile Research Institute, said the rise of local EVs in emerging markets "represents both a shift in the competitive landscape and the creation of new markets for customer and technology partnerships." He recommended that Korean companies move early to secure supply chain footholds through co-development, joint ventures with local manufacturers, and joint market entry alongside finished-vehicle makers.