An inside look into VinFast, Vietnam’s Tesla hopeful with lofty goals

Vingroup just hosted Elite Vietnam Tour – a four-day, multicity extravaganza aimed at convincing attendees that the company’s electric car division, VinFast, can make good on its lofty goals.

Considering VinFast hadn’t made a car before 2017, it’s moving at light speed. Its factory in Haiphong, to Hanoi’s north, spans 9 million square feet. Another one costing US$4 billion (S$5.7 billion) in phases is planned for North Carolina.

Its goal is to make and sell around 1 million electric cars within five to six years, an extraordinary target considering the company produced about 35,000 last year.

VinFast isn’t just targeting domestic customers, either. It plans to sell EVs to customers in the US, Canada and Europe, going up against legacy automakers led by Toyota, Volkswagen and General Motors, as well as Tesla and the raft of aggressive Chinese upstarts such as Nio and Xpeng.

It’s a tall order for a company barely known outside Vietnam. But as the 180 or so assembled media, influencers, customers and business partners were often reminded last week, seeing is believing.

This much was clear from the immersive Vingroup experience: Founder and Chairman Pham Nhat Vuong, who didn’t make an appearance, has very deep pockets.

The factory visit, which stretched for the better part of a morning and included an elaborate champagne and lobster lunch, was eye-opening. From the body shop to the press shop, to the battery pack facility and general assembly line, the cavernous complex was stocked with state-of-the-art German machines and gleaming robots. VinFast also makes its own chips and is starting to make its own EV batteries “just next door”, attendees were told.

Very little equipment was operating during the visit, however, and most places were devoid of workers, except a handful who looked as interested in the gawping guests being ferried around in golf carts as visitors were in them.

A spokesman said after the tour that VinFast had stopped making gasoline vehicles and only has one model in production for the time being, with a second on the way.

Output is only running in range of tens of thousands, so lines are operating in moderation for the moment. The factory has been designed to eventually reach 250,000 units annually and will operate at high capacity when the VF 8 and VF 9 vehicles are ready to be sold in Vietnam and international markets.

The VF 8, which starts from US$42,000 with monthly battery subscription or US$57,000 with battery included, is a good-looking SUV. It handles magnificently, is whisper quiet and boasts an impressive array of bells and whistles, including a touch-screen console, voice-activated features and stylish leather interior. The Netherlands embassy in Vietnam bought one in orange.

VinFast’s aggressive direct marketing approach may well work. Social media posts by folks flown in from Europe and the US will sway some consumers, and executives working on the VF 8 said US President Joe Biden’s tweet about the planned factory in North Carolina did wonders for the company’s profile in North America.

But whether VinFast can fulfil the 65,000 pre-orders it says it has globally, some of those buyers got the same tour to Vietnam, thrown in for free, and go on to sell 750,000 EVs annually by 2026 is unclear. It took Tesla 18 years to cross that threshold for the first time.

The notion that Vuong, Vietnam’s richest person, with a net worth of US$5 billion, will easily manage to sidestep the production hell Elon Musk has referred to seems unlikely. Last week’s tightly choreographed tour was impressive, but more will need to be seen before believing what would be some astonishing feats.

 

SOURCE: NEWS AGENCIES