In Ho Chi Minh City, Vietnam, young driver Dat opted for Xanh SM, an environmentally conscious ride-hailing app, over its more established competitor, Grab. At merely 23 years old, Dat underscores the appeal of Xanh SM, an electric taxi and motorbike service founded by Pham Nhat Vuong, chairman of the Vietnamese conglomerate Vingroup and the country’s wealthiest entrepreneur. His choice was influenced by Xanh SM’s commitment to environmental sustainability, its focus on energy-efficient technology, and its status as a homegrown enterprise.
Xanh SM, which began operations in April 2023, has quickly gained traction with its fleet of eye-catching mint-green electric vehicles. Distinct from Grab, Xanh SM offers vehicle rentals alongside ride-hailing services, positioning itself as both a driver-friendly alternative and a pioneer in sustainable transportation in Vietnam.
Despite its rapid growth, some industry analysts question the long-term viability of Xanh SM, particularly regarding its connection to VinFast, Vietnam’s first domestic automobile brand, also founded by Vuong in 2017. While VinFast has made headlines for shipping its first batch of cars to the United States, it has faced challenges, including sluggish sales and postponed factory openings. Currently, a significant portion of VinFast’s revenue derives from subsidiary sales, including transactions with Xanh SM.
In 2023, Xanh SM invested heavily—approximately 9 million—procurement of electric taxis and scooters, with plans to acquire an additional 14,600 electric vehicles in a 9 million deal. As Vuong juggles these ambitious projects, the backing from the Vietnamese government bolsters his vision for future electric mobility solutions. However, critics caution that this support may lead to risky business strategies, suggesting that the concentration of power and financial backing could foster a reliance on government intervention.
As Xanh SM expands its operations beyond Ho Chi Minh City to nearly half of Vietnam and neighboring Laos, a national survey reveals that 36 percent of respondents favor Xanh SM, indicating a significant competitive position, though it still trails behind Grab, which commands a 62 percent preference among users.
Market demand for environmentally friendly alternatives like electric bicycles continues to rise in Vietnam, reflecting a broader shift towards sustainable transport. Local industry leaders, like Long Nguyen of Dat Bike, affirm that consumer interest in electric mobility is steadily growing, showcasing a commitment to reducing carbon footprints.
Looking to the future, Xanh SM aims to become a leader in the electric mobility sector in Southeast Asia. While analysts recognize the challenges posed by international expansion, including logistical hurdles and increased operational costs, the company’s ambition aligns with a growing trend towards sustainable transportation across the region.
In summary, the journey of Xanh SM epitomizes the innovative spirit of Vietnamese entrepreneurship and the pursuit of sustainable development within the automotive sector. As competition in the electric vehicle market intensifies, the trajectory of both Xanh SM and VinFast will undoubtedly be closely monitored in the coming years.
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