Vietnamese automaker VinFast plans to introduce two new battery-electric vehicles at the LA Auto Show next month, both expected to go on sale in the U.S. market by late 2022.
The first major automaker based in the Asian nation, VinFast has a short history but large ambitions, with plans to enter both the European and U.S. markets. But it has also had to downsize some of its sales targets due to the global shortage of semiconductors.
“Global demand for quality EVs drives the work of our VinFast team every day,” said Le Thi Thu Thuy, vice chairwoman of Vingroup, the parent of VinFast. “We have made vigorous investments and conducted extensive market research to create premium EVs that will satisfy the desires of global customers.
“This is just the beginning. We hope to capture the hearts and imaginations of even the most demanding customers with VinFast’s dedicated service and smart, high-quality products.”
From instant noodles to automobiles
VinFast is the brainchild of Pham Nhat Vuong, a Vietnamese native who, during the past quarter century, parlayed $40,000 in loans to start an instant noodle business into an empire worth billions. The Vingroup today is the largest corporate entity in that country and operates a range of businesses that covers schools, hospitals, shopping centers, resorts and other enterprises.
The automotive venture put out its first two products, both targeting the mid-range luxury market, in 2019. That was barely two years after the company was formed. It was able to slash development times by turning to more established partners, including BMW.
VinFast was already working up plans to go electric before its first models went on sale and now has two battery models being readied for production, the VF e 35 and VF e36. The e35 will target the D, or midsize segment, the e36 slotting into the larger E segment.
Plenty of questions, few answers
While pricing information hasn’t been released, founding CEO Jim DeLuca previously told TheDetroitBureau.com that VinFast will follow a modified version of the strategy used by other Asian automakers entering the American market during the past decades. It will undercut more established brands on price. But it will start out with relatively large products targeting more premium sectors of the market. Hyundai, by contrast, entered North America with the stripped-down Pony subcompact.
“These two EVs integrate ADAS (Advanced Driver-Assistance Systems), featuring Lane Assist, Collision Warning, Driver Monitoring, Fully Automated Parking, Summon Vehicle, and more,“ VinFast said in a statement. “Moreover, VF e35 and VF e36 are equipped with Smart Infotainment, including in-car control features with Voice Assistant, Virtual Assistant, and E-Commerce Services, among others.”
Beyond that, specific details haven’t been released but, during a prior visit to the company’s headquarters near Hanoi, officials indicated much of the core vehicle design and engineering was being handled in-house. But it is expected to be turning to outside partners for the electric drivetrain technology the two models will use.
To help hold down pricing, global CEO Michael Lohscheller told Reuters VinFast will use a battery leasing strategy to hold down costs. It did not provide details on how that approach will work.
U.S. plans coming into shape
VinFast already has set up a new headquarters in California, and company officials told the Reuters an order bank will be opened early next year, deliveries to begin by late 2022.
VinFast also wants to rely heavily on the Internet for sales. But it will have to work within the varying franchise laws across the U.S. which would limit the company’s ability to handle sales completely online. VinFast said it plans to have as many as 60 U.S. dealerships by the time it begins retail operations.
Among the questions likely to be posed during the L.A. Auto Show debut is how wide distribution will be. In years past, automakers tended to limit the availability of their all-electric vehicles, focusing primarily on California and other states that have copied its strict emissions regulations. Mazda will take that approach with the new MX-30, its first battery-electric car.
Going global won’t come cheap and Lohscheller told Reuters it could seek to raise funds by listing itself on one of the U.S. stock exchanges. A number of EV startups have taken that route over the last several years.
Stock offering could be in the works
“VinFast has a plan for an IPO in the U.S., but specific timing will depend on the market and other conditions,” Lohscheller told Reuters.
Initially, the e35 and e36 models will be produced at a plant along Haiphong, in Vietnam’s north — a facility along a waterfront that was heavily bombed during the Vietnam War nearly a half-century ago.
The executive also confirmed what DeLuca previously told TheDetroitBureau.com, that VinFast could build an American assembly plant. It will “keep an eye on the possibility,” the new CEO said in an e-mail to Reuters.
That could be critical to remaining competitive. Congress currently is studying plans to extend and expand the current $7,500 EV incentives program. Going forward, they may include additional tax credits for vehicles assembled in the U.S. Another, more controversial, provision would also add $2,500 for vehicles assembled using union labor.
The two new VinFast EVs will debut at the LA Auto Show during its media preview on Nov. 17 and 18.
They don’t know what they don’t know.