VinFast and its parent conglomerate Vingroup have set staggeringly ambitious goals for the fledgling Vietnamese automaker – aiming to transform VinFast from solely a domestic producer to a major global player rivaling Tesla in a matter of a few years. But does VinFast actually have the technology, manufacturing capability and marketing prowess to unseat Tesla from its current leading position in the high-tech EV wars?
VinFast‘s Impressive Launch Backed by International Expertise
Founded in 2017, VinFast is helmed by Vietnamese billionaire Pham Nhat Vuong – the country‘s first billionaire businessman who formed Vingroup in 2000. Seeking to bring world-class automotive engineering expertise into Vietnam, Vingroup spared no expense hiring a virtual who‘s who of elite European design firms to launch VinFast.
These key partners lent their skills to VinFast during its infancy, enabling the company to leapfrog traditional product development timelines:
| Automaker | Contribution |
|---|---|
| Pininfarina | Legendary 93-year old Italian design house that shaped VinFast‘s early model designs |
| Zagato | One of Italy‘s leading automotive coachbuilders assisted with early VinFast vehicle exteriors and interiors |
| Magna Steyr | Major Austrian auto manufacturer took the lead in fully developing 2 critical early VinFast models |
Vingroup also infused over $1.5 billion into constructing VinFast‘s sprawling 700 hectare, 500,000 unit per year production complex in Haiphong, Vietnam – completing the facility in just 21 months.
By leveraging experienced global partners and Vingroup‘s substantial capital resources, the young VinFast was able to sell over 30,000 gasoline-powered vehicles in its home Vietnam market in its first full year selling vehicles in 2020.
Going All-In on Smart EVs
Riding a wave of early momentum in Vietnam, VinFast made the strategic decision in 2021 to stop producing gas vehicles and pivot fully into electric vehicles starting in 2022 and beyond.
The company unveiled ambitious plans to introduce five EV SUV models spanning a range of vehicle size classes and price points:
| Model | Class | Description |
|---|---|---|
| VF 5 | Mini-SUV | Subcompact electric crossover with seating for 5 |
| VF 6 | Subcompact SUV | Entry-level electric SUV with 298 hp motor |
| VF 7 | Compact SUV | 5 passenger electric SUV starting under $41,000 |
| VF 8 | Midsize SUV | 402 hp family SUV with 87 kWh battery pack |
| VF 9 | Full-size SUV | 7 passenger, 3 row large electric SUV |
VinFast is specifically setting its sights on breaking into the wider mid-tier of the global electric SUV market, rather than immediately gunning for high-end buyers like Tesla, Rivian and Lucid have targeted historically.
And the company isn‘t just paying lip service to plans of selling EVs outside Vietnam – VinFast has mapped out an extensive $4 billion dollar investment into building multiple North American and European manufacturing plants starting as soon as 2024. Constructing this local production capacity will allow VinFast to qualify for expanded US federal tax credits under new regulations favoring locally-built EVs.
VinFast VF 8 Takes Direct Aim at Tesla
The first electric model from VinFast headed to the US will be its midsize VF 8 crossover SUV – set to challenge Tesla‘s hot-selling Model Y compact SUV directly when deliveries start in December 2022.
Packing dual electric motors, the futuristic VF 8 is expected to generate 402 horsepower and sprint from 0-60 mph in a quick 5.5 seconds. The interior features plush seating for 5 passengers, an expansive glass roof panel that runs edge to edge and a tech-heavy infotainment system with built-in apps and gaming.
- Early reviews of the pre-production VF 8 from journalists granted access have been fairly positive – noting refined ride characteristics and high levels of interior refinement. Less glowing are initial impressions of VinFast‘s new battery leasing strategy.
| Spec | VinFast VF 8 | Tesla Model Y Long Range |
|---|---|---|
| Range (mi) | 292 | 330 |
| 0-60 mph (s) | 5.5 | 4.8 |
| Battery Capacity | 87 kWh | 82 kWh |
| Price (starting) | $56,700* | $58,190 |
| *With owned battery. Leasing battery packs available starting at $42,200 |
While the VF 8 can‘t quite match the Model Y‘s blend of performance and efficiency yet, VinFast has wisely future-proofed their EVs with advanced driver assist capabilities and the framework to enable autonomous driving via over-the-air updates down the road.
VinFast‘s Curious Battery Subscription Model
Rather than follow Tesla‘s conventional model of simply selling customers the battery pack along with the vehicle, VinFast is breaking new ground by offering EV batteries a la carte via an optional subscription plan.
Dubbed the VinFirst Battery Subscription, this strategy allows buyers to lower the upfront sticker price of vehicles like the VF 8 to as little as $42,200 in exchange for signing up for a monthly battery rental payment. VinFast sets its battery subscription rates at $169/month for the VF 8.
Proponents note the subscription could boost adoption by reducing pressure on cash-strapped buyers to cough up nearly $20,000 extra for the battery alone.
However, the subscription means managing yet another monthly bill and could feel overly restrictive for buyers who don‘t drive extremely high annual mileages. For Americans used to simply financing battery packs into their auto loans, I expect the unfamiliar battery rental idea to face substantial pushback.
VinFast does provide the option to purchase the battery pack upfront at an added cost of roughly $15,000 – bringing the VF 8 closer to $57,000 starting price – but they seem to be de-emphasizing this alternative approach so far.
Scalability Challenges Loom Large
There is no arguing VinFast has embarked on a truly monumental effort – endeavouring to scale from being merely a domestic automaker selling 30,000 cars annually to a global EV heavyweight vying for hundreds of thousands of international sales across just a few years.
Transforming into an internationally recognized brand competing toe-to-toe with the likes of Tesla and Ford will require overcoming immense marketing challenges for the unfamiliar Vietnamese automaker. And early build quality issues plaguing VinFast‘s initial models will need to be sorted before mass export.
On the vehicle technology front, VinFast‘s powertrain and battery capabilities fundamentally trail rival offerings from Tesla in real world driving range and charging rates. The company will need to invest billions into R&D and recruiting additional software experts to continue evolving their EVs‘ self-driving, connectivity and performance.
Respected analyst firm Gartner forecasts steady but relatively slow EV sales growth for VinFast – projecting just 64,000 VinFast EVs will be sold across the US and Europe by 2025 unless technology and brand reputation accelerate tremendously.
While I expect VinFast to carve out a small niche serving value-focused crossover shoppers in leading EV adoption regions, the odds of the young company seriously challenging Tesla‘s technology leadership before 2030 remain decidedly low in my expert view. But VinFast‘s daring EV expansion gambit will certainly make the global green auto race far more interesting to monitor.
