Vietnamese automaker VinFast plants an electric foot in the US market

The auto industry is a tight-knit bunch. It rarely allows anyone to join the game, although new automakers like Tesla and Rivian periodically sneak in. Most of the time, the market gets something like Polestar, an electric vehicle brand that has its roots in an established automaker. Italian and Chinese automakers were unable to gain public acceptance.

Vietnamese automaker VinFast tries to be one of the few to do so.

The company was established in 2017 by VinGroup, which was founded by Vietnamese businessman Phạm Nhật Vuong in 1993. VinGroup started by selling dry foods in Ukraine, before moving to Vietnam permanently in 2000 and to broaden their professional horizons.

Besides cars with VinFast, VinGroup sells smartphones with its VinSmart brand, it has the largest semi-wild animal conservation park in Southeast Asia which houses more than 4,000 animals under the name VinPearl, billion dollar amusement parks like Vu Yen under its VinWonders brand, VinFa, a drugstore company and many more.

“There are really three things happening. First, VinFast sees an opening in one of the toughest automotive markets in the world,” said Mike Dunn, CEO of global EV consultancy ZoZo Go. Newsweek. “We’re only in the early innings of people waking up to electric vehicles. The market is young.”

“Secondly, VinFast is a hero in Vietnam, there is national pride there. They also have the full support of the leaders in Hanoi. And lastly, this is an opportunity to also get the full support of the US government, unlike what China gets,” Dunn said.

The name VinFast is an amalgamation of several Vietnamese words explaining the direction of the brand, including Việt Nam (Vietnam), phong cách (Style, Ph=F), an toàn (Security), sáng tạo (Creativity) and tiên phong, which means pioneer.

The company’s first move into the United States was the 2021 Los Angeles Auto Show, where it introduced its small two-row mid-size VF8 SUV (from $41,000) and the VF9, a larger but still medium-sized three-row. SUV that starts around $56,000.

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“We continue to see more and more newcomer electric vehicles hitting the US market and VinFast has plenty of momentum to fuel their arrival. While some new startups are often shy of funding, lack a factory assembly and an R&D center, or just have one model in the cards, VinFast is different,” said Robby DeGraff, analyst at AutoPacfic Newsweek.

“Although they are new to us, for a few years now VinFast has already had a huge impact in its home country. Vietnam is a nation mainly made up of scooters and motorcycles, with millions and millions of between them dotting the roads of the Mekong Delta in the south to northern Hanoi, where VinFast’s sprawling assembly plant has already produced three of the country’s best-selling vehicles.VinGroup, VinFast’s parent company, is cash-rich and wants to do everything possible to have a strong presence here on our shores,” he said.

In January 2022, at CES in Las Vegas, the company showed off three more electric crossovers (VF5, VF6, VF7), a new booking program that included a trip to Vietnam and said it was stopping its gas-powered vehicle operation. .

“Originally, the VF 8 and VF 9, which share many components, were developed as both an internal combustion engine version and an electric vehicle version. When VinFast decided to be a 100% development of the internal combustion engine versions has ended. The VF 5, 6 and 7 were developed as pure electric vehicles from the start of their development and the VF 6 and VF 7 share the same platform” , said Craig Westbrook, director of VinFast US services. Newsweek.

At the New York Auto Show in April, it displayed VF8 and VF9 again, boosting brand awareness. The company is already taking reservations for models.

“We are now taking fully refundable $200 pre-orders for our five- and seven-passenger VF 8 and VF 9 electric SUVs and they will be delivered to customers by the end of this year. The VF 6 and VF 7 will be available soon. year,” a VinFast spokesperson said. Newsweek.

Although the price of VinFast’s electric vehicles is slightly below average compared to its main competitors, it will have a unique approach to battery life. Instead of selling the lithium-ion batteries with the vehicle, VinFast will require owners to lease them, which will be reflected in the monthly payment.

The flexible plan is designed for customers who travel less and offers a monthly battery subscription fee of $35 for VF 8 and $44 for VF 9, which includes 310 miles of travel per month. From the 311th mile, the battery subscription costs per mile are approximately 11 cents for the VF 8 and 15 cents for the VF 9.

According to the US Department of Transportation, the average American travels 39 miles per day. This would put the monthly range at around 390 miles, slightly above the 310 miles allowed. That would only add up to an additional $9.90 per month on VF 8 and $13.50 for VF 9. That would bring the monthly totals to $44.90 and $57.50, respectively.

Fixed packages, which allow unlimited range, are $110 for the VF 8 and $160 for the VF 9. This policy is automatically transferred to a new owner if the vehicle is sold.

“We offer the same battery subscription policy in all markets with fixed and flexible packages to meet the different needs of our customers. This is one of VinFast’s main sales policies, applied to all electric vehicles sold through the end of 2023 to our advance reservation holders,” Westbrook says.

VinFast is currently working on lending partners and rental terms and agreements, and says more details will be announced soon.

Westbrook says the policy is designed to make vehicles more affordable. It reduces the initial cost and gives peace of mind to drivers worried about the long-term health of their battery. VinFast has a lifetime warranty on its batteries, which are replaced when the capacity drops below 70%. Plus, as battery technology evolves, buyers get the latest technology.

Traditional automakers like Ford and Hyundai also offer battery warranties. Ford’s warranty says 8 years or 100,000 miles for repairs, replacements and adjustments, while maintaining 70% capacity. Hyundai does 10 years, 100,000 miles for the powertrain, including the battery.

“As a new company, they’re going to have to differentiate themselves,” Dunn said. “And to be different from Kia and VW and the rest, they offer the battery (one of the first things drivers worry about) risk-free. It also helps that the company is headquartered in the area where 90 % of the world’s batteries come from and have a long-standing relationship with them.

VinFast also seeks to eliminate hazardous battery waste with programs to reuse or recycle used power units. Volkswagen is doing the same at its new battery recycling plant in Salzgitter, Germany. Westbrook noted that customers who deposit with the landline plan will receive the lifetime subscription for free. It is also transferred to a new owner when the vehicle is sold.

Like Ford does now, VinFast intends to sell SUVs in a variety of sizes. In the United States, Ford sells the EcoSport, Escape, Edge, Explorer and Expedition, each larger than the last. VinFast will sell VF7, VF8 and VF9 in the same way.

The VinFast VF8 will compete against the internal combustion engine and plug-in hybrid Jeep Grand Cherokee 4xe, the upcoming battery-electric Chevrolet Equinox and the existing all-electric Ford Mustang Mach-E. The VinFast crossover features two electric motors that provide all-wheel-drive capability.

Total output for the VF8 Eco trim level is rated at 348 horsepower and 368 pound-feet (lb-ft) of torque and offers an estimated 260 miles of range or 292 miles on the European cycle, which tends to have range estimates higher than the Environmental Protection Agency estimates. The Plus version develops 402 horsepower and 457 lb-ft and offers a range of 248 or 277 miles. It starts at $40,700.

The base Ford Mustang Mach-E delivers 266 horsepower and 317 pound-feet of torque and has a range of 247 miles starting at $42,895 before tax credits.

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The VF9 is a larger three-row SUV with all-wheel drive, thanks to two engines. The Eco and Plus trims both deliver 402 horsepower and 457 pound-feet of torque. Range-enhanced versions travel 369 and 360 miles for Eco and Plus trims. The standard range versions run 272 miles and 262 miles. Both are on the European WLTP cycle. VF7 is also on the way.

“The trio of eye-catching crossovers set to go on sale here in the coming years are quite intriguing, from the three-row VF9 to the excellently styled VF7 which really strikes me as the most ‘premium’ offering of the three. VinFast has promised an impressive suite of ADAS and infotainment technology and solid lineup numbers that will be a great fit for the majority of US consumers,” DeGraff said.

Both VFs have exceptional charge times using a 400 volt electrical architecture. The VF9 can go from 10-70% charge in approximately 26 minutes for standard and 35 minutes for extended range on a DC fast charger. The VF8 shortens this time to around 24 and 31 minutes. For comparison, the Kia EV6 with a 77.4 kWh battery has a range of 310 miles and takes about 18 minutes to charge from 10 to 80 percent. This new electric vehicle uses an 800-volt architecture, hence faster times.

“I really support the success of VinFast, but I’m a little concerned about their idea of ​​having buyers subscribe monthly or annually for the battery on top of the price of the vehicle. As the list of electric vehicles available “For consumers grows longer with each coming year, the competition is going to become more intense. People in general aren’t necessarily enamored with the idea of ​​subscriptions, especially when it comes to owning a vehicle,” said DeGraff.

He noted that the option could drive VinFast buyers away to those with no additional cost.

“VinFast is savvy, realistic and understands the market,” Dunn said. “There should be no illusions that entering the American market will be easy. It took years for the Germans, Japanese and Koreans to gain confidence. have good cards and are there to play them.”