Move over, Mr Musk. Here comes Uncle Ho’s EV Offering
Bored with how common Teslas have become in the US of A? Well, fret no more. Here comes VinFast from Vietnam.
Manufactured by Vietnam’s largest conglomerate, Vingroup, the VinFast line of cars will commence the marketing of their EV models with a battery leasing option, which they hope will be enough to tempt would-be EV owners to choose them over the homegrown upstart that is Tesla.
In their home in Northern Vietnam, they are very much the new kid on the block, but have already become the fifth largest player behind Hyundai, who is first, Toyota in second, Kia in third and Mazda in fourth. They are anything but short on ambition as they eye a US listing with a valuation somewhere in the USD60 billion range.
Presently, the plan is for the company to launch in 2022 in both Americaland and Europe, where they truly believe they can go head to head with Elon Musk’s Tesla – well, according to CEO Nguyen Thi Van Anh. Of course, there is a lot of other competition for the EV sector of the market, not just from start-ups funded by Wall Street; some competition may come from established car companies like GM and BMW and Volkswagen and Jaguar, and let us not forget the Chinese companies like Geely’s Volvo, which is trying to make a splash.
“We are going to North America – US, Canada – and Europe at the same time. In Europe, we’re going to Germany, France and the Netherlands,” said CEO Van Anh (in a recent interview at the company’s purpose-built factory, on an island near the northern port of Haiphong.
Vingroup has an interesting history. It is Vietnam’s version of the Korean Chaebol in many ways. It was originally started by Pham Nhat Vurong (pictured below) in 1993 as an instant noodle business in the Ukraine. The company’s growth has very much followed the meteoric rise of Vietnam, where they moved to in the year 2000. The company has interests in a diverse portfolio, ranging from real estate, resorts, education, health care, telcos and, of course, cars.
Even with a wide base, the company will have to be able to compete with the big boys in the West, something that can be done, but the question remains on whether they have pockets deep enough to take on the R and D budgets of the likes of VW, Toyota or GM. Vinfast was only created back in 2017 and even though they have a management team lead by and including a number of GM heavyweights, they will have their work cut out for them.
Where they may win is with the battery leasing idea. Batteries are the most expensive part of any EV and with a leasing deal, this means the cost of the battery will not be included in the price, enabling them to compete quite well, perhaps. Vinfast believes that they can win because they are going to provide a bigger, better car at a fraction of the cost.
We know that Tesla sells for about USD50,000 but as of yet, there is no information on prices for the Vinfast. We do know that they are targeting sales of 45,000 units in the first year though.