Vietnam carmaker Vinfast set to roll out electric cars globally
Vietnam-based automaker Vinfast announced that it will stop manufacturing internal combustion engine vehicle models and has set its sights to sell overseas, as it goes all-electric by the end of 2022. It will also focus significantly on research and development for the manufacturing of its all-electric based vehicles, the company said.
Vinfast's vision to catapult itself towards a 2022 U.S. listing, combines the clout of a powerful parent with potential for a shift to new energy vehicles in its fast-growing neighbourhood. The Refinitiv publication IFR says that the U.S. listing could potentially raise up to $3 billion for Vinfast.
The overseas expansion plans support some of the electric vehicle industry's valuation hype. While Tesla and western rivals eye the far east and Chinese peers Xpeng and Nio have their sights on Europe, Vinfast has its plans for the United States, Canada and Europe with Southeast Asia being a potential destination as well. Vinfast's Vietnamese factory boasts an annual capacity of more than the country's 2022 sales, as reported by manufacturers. This means that Vinfast can easily cater to growing demand in the region.
Vinfast sold its first electric car last month and hopes to build on its earlier success: drivers bought more than 35,000 of its gasoline models in 2021, some 18% of the annual sales of passenger vehicles reported over the period by the Vietnam Automobile Manufacturers' Association. With around 20% of Vietnamese consumers considering hybrid or electric for their next purchase, according to Deloitte, the brand's battery-powered cars are positioned to do well too.
Vinfast is 51.5% owned by Vingroup, the country's biggest listed company by market capitalisation. Vingroup previously mentioned that it has targeted global electric vehicle sales of 42,000 units this year. The carmaker is eyeing a $60 billion valuation for its vehicles.
Having a retail-to-property conglomerate parent may prove to be an advantage for Vinfast, as it can offer its shopping customers deals on vehicles, and install chargers at strategic spots, for instance. In India, the consumer products-to-hotels conglomerate, Tata is taking a similar electric lead. A strong owner can help crowd in funding too: in 2020, Vingroup sold a $650 million stake in Vinhomes to a consortium including KKR and Singapore's Temasek to help fund Vinfast.
However, it hasn't been smooth sailing for the Vietnamese car manufacturers. In December, former Volkswagen veteran Michael Lohscheller left his role as chief executive of the Vietnamese carmaker after just five months in the position. Despite the bump in the road, Vinfast is set for a fast ride.
To capture the market, the automaker announced a battery lease programme that will offer customers two subscription plans: "Flexible" (a minimum subscription fee for 300miles/500km per month, extra costs from the 301st mile/501st km) and "Fixed" (unlimited range). VinFast will cover all expenses on battery maintenance and will replace the owner's used batteries for free when charging and discharging capacity falls below 70%.
The company will also be offering 10-year warranty for all its electric vehicles in all markets.