Ho Chi Minh City, Vietnam – In a landscape dominated by established names, 23-year-old gig driver Dat has chosen to align himself with Xanh SM, an electric taxi and motorbike service, rather than the more ubiquitous Grab. This shift reflects not only a personal preference but also a broader trend towards sustainable transportation options in Vietnam. Xanh SM, founded by Pham Nhat Vuong, chairman of the Vietnamese conglomerate Vingroup and the wealthiest individual in the country, has rapidly positioned itself as a competitor in the ride-hailing market since its inception in April 2023.
Dat’s endorsement of Xanh SM is rooted in its environmentally friendly credentials and its support of local industry. “Xanh SM will definitely be more popular than Grab in the future,” he shared, underlining a commitment to sustainability and domestic entrepreneurship. The company stands out from its rivals by renting vehicles to drivers, thus broadening access to electric mobility.
Despite its rapid rise on the streets of Vietnam, Xanh SM faces scrutiny from analysts who question its long-term growth potential. Vuong also oversees Vinfast, Vietnam’s pioneering automotive brand, which has encountered challenges, including financial losses and delays in factory openings. Still, the synergy between Xanh SM and Vinfast appears to be a strategic approach for Vuong, reinforcing the country’s burgeoning electric vehicle (EV) ecosystem.
The demand for electric vehicles has been steadily increasing, with a reported growth of about 30 percent annually in interest towards non-gasoline powered transportation, according to Long Nguyen, marketing director at Dat Bike. This growing market significantly influences the competitive landscape in which Xanh SM operates.
As Xanh SM works to solidify its presence domestically, it has established a fleet of 20,000 electric vehicles and 22,000 motorbikes, extending its services across nearly half the country and into neighboring Laos. A recent survey by Decision Lab revealed that 36 percent of respondents favored Xanh SM as their ride-hailing app, demonstrating its growing popularity.
While Xanh SM’s future aspirations include expanding into Southeast Asia by 2025, the venture comes with challenges. Setting up operations and infrastructure in new markets may entail significant costs. Nonetheless, observers remain hopeful about its prospects, particularly with the backing from both the government and the public, which plays an essential role in fostering innovation and nurturing homegrown businesses.
The landscape in the EV market remains competitive, with established players like China’s BYD offering compelling alternatives. However, Vingroup remains steadfast in its belief that Vinfast and its associated ventures will eventually pave the way for sustainable growth.
In the face of industry hurdles, Vuong’s unwavering resolve was recently articulated when he expressed his commitment to continue funding Vinfast: “I’m still working every day to make money for Vinfast.” This determination resonates with many Vietnamese who are witnessing a transformative shift in how the country approaches transportation.
As he drives around Ho Chi Minh City, Dat reflects positively on his experience with Xanh SM, noting that while their electric vehicles may not accelerate as quickly as traditional fuel bikes, the trade-off is a more sustainable approach to transportation, allowing drivers to pause and recharge.
With the global shift towards greener solutions, Vietnam is positioning itself as a rising player in the electric vehicle market, providing opportunities for local talent and innovations to thrive.
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