Vinfast builds Vietnam’s first EV battery factory
- Vingroup has started building a $174 million battery cell plant for its VinFast electric vehicle project on an 8-hectare (20 acres) plot.
- VinFast’s new battery plant will have the capacity to produce 100,000 Lithium battery packs annually.
- The company also announced a US$200m investment to establish headquarters in the US and plans to commence construction of a US vehicle manufacturing facility by 2025.
In the next few years, Vietnam will see its electric vehicle battery industry scale up significantly with the help of a new project in the central province of Ha Tinh.
Vingroup, Vietnam’s largest private conglomerate, said it had started building a $174 million battery cell plant for its VinFast electric vehicle project on an 8-hectare (20 acres) plot.
It is one of a Vietnamese firm’s most ambitious new ventures and highlights its growing ambition to expand outside its domestic market into Southeast Asia.
The cell plant would also enable Vinfast to own its supply chain of batteries and parts.
Vingroup to mass produce EV batteries
According to Bloomberg, VinFast’s new battery plant will have the capacity to produce 100,000 Lithium battery packs annually. It will supply batteries for 80,000 EVs per year when fully operational in 2022.
Thai Thi Thanh Hai, vice-chair of Vingroup and vice-chair of the board of VinFast said, “This is in the focus of VinFast’s localization strategy of supply.”
In an emailed statement to Reuters, the company works with various batteries partners, including StoreDot, Gotion High-Tech and ProLogium. VinFast also focuses on internal research and development while establishing research facilities to develop battery and charging technologies.
The company also announced a US$200m investment to establish headquarters in the US and plans to commence construction of a US vehicle manufacturing facility by 2025.
APAC – a growing market for EV batteries
The Asia-Pacific region is a growing market for EV batteries. The EV battery industry in the region, which includes China, India, Japan and South Korea, is expected to record robust growth over the next few years. This can be attributed to these countries’ rising demand for electric vehicles.
The Asia-Pacific EV Batteries Market is expected to reach a value of $90.41 billion by 2028, at a CAGR of 20% during the forecast period 2021 to 2028.
In 2020, China posted 1.3 million electric vehicles sales, driven by the increasing adoption of the Tesla Model 3 and Hongguang Mini. Increased government efforts to increase sales of electric vehicles to 25% of car sales by 2025 have significantly boosted the growth of this market in China.
Increasing government initiatives to deploy electric and hybrid vehicles, including tax reductions and grants for residential and commercial infrastructure, encourages the adoption of electric mobility. This is expected to drive market growth over the forecast period.
Rise in EVs in the APAC region
The APAC region is seeing a rise in EVs demand. Over the next few years, EVs will become a mainstream option in this region. Government regulations also support its growth by providing incentives and subsidies to buyers.
Many countries in the region realize the need and importance of electric vehicles to replace gasoline or diesel cars. Indonesia, Thailand, Vietnam, and Myanmar have shown interest in increasing the adoption of EVs over the next five years. EV sales in these four countries will increase by more than 10% year-on-year till 2021
Additionally, consumers demand for EVs in this region is growing because of their environmental benefits over conventional internal combustion engines (ICEs).
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