Vietnam’s VinFast has ambitious EV plans, including taking on Tesla
- Vietnamese automaker Vinfast filed for an initial public offering (IPO) In US with plans to launch its EV there by the end of this year.
- The company also plans to spend about US$4 billion on its first US factory complex.
In 2019, VinFast became the first fully-fledged domestic car maker in Vietnam and after recording stellar growth within the first year of its operations, the company decided to break into the EV market. To do that, VinFast decided to make its way into the world’s second-largest automotive market, the US, taking on a plethora of EV players, including Tesla. The company is even considering an initial public offering in the US to support the growth of its EV sales in the country.
What started as an idea of selling some electric crossovers, progressed towards an ambitious plan of investing more than US$200 million to open a US headquarters based in Los Angeles. The company then progressed with plans to open more than 60 sales locations, multiple service centers and some mobile service sites by this year.
Now, the automotive arm of Vietnam’s biggest conglomerate Vingroup, wants to start making EVs in the US by 2024, and that would be initiated with a US$2 billion plant that has an annual capacity of 150,000 cars in North Carolina. In total, the company plans to have a total investment of US$4 billion in its first US factory complex.
And as if all those expansion plans into the US were not ambitious enough, earlier this month, the company filed for an initial public offering (IPO) in the market it’s expanding into. In the IPO filing, VinFast revealed plans to seek funding from the US Department of Energy in an apparent effort to raise its name recognition in the world’s second-largest car market.
VinFast also said it plans to build a plant in Germany. For starters, VinFast began taking preorders globally for two electric SUVs this year with a goal to begin delivering them in the fourth quarter. The company is targeting global electric vehicle sales of 42,000 this year itself. VinFast have also said that prices for its VF8 sport SUV started from US$41,000 in the US. By comparison, a Tesla SUV sells for around US$63,000.
To recall, after Vingroup announced plans to enter the auto industry in 2017, the company began making internal combustion engine cars in 2019 at a plant in the northern Vietnamese port city of Haiphong. VinFast was quick and agile, as it was able to start making cars in just two years, considering how the auto parts industry in Vietnam was still underdeveloped.
Vinfast, according to Nikkei, were focusing on assembly and buying platforms, engines and other key parts from foreign companies such as BMW, Bosch and General Motors. However, by 2021, VinFast shared its intentions to cease production of gasoline-powered cars by the end of this year.
“But if the company plans to focus on EVs, it makes sense to look to the US and Europe, as it will take a long time for EVs to catch on in Vietnam. The company initially planned to enter Western markets with exports, but realized it would not be able to compete unless it produced locally,” Nikkei said, quoting sources close to the company.