It felt like little more than the most recent chapter in the rocky road to a totally electric future when a large business in Vietnam revealed plans to launch a new EV brand with an IPO to follow. EV startups have been a dime a dozen in recent years. When VinFast offered us to visit Vietnam to observe the entire VinGroup ecosystem firsthand, our interpretation of car launches, computer-generated pictures, and online specifications were colored by this cynicism.
Note: The author’s lodging and travel expenses to this event were covered by VinFast.
In front of us, we witnessed the vision of VinGroup, one of the biggest companies in Vietnam, come to life in the form of structures, automobiles, industries, and workers. With its ambitious vision for the future, VinGroup is not just upending the existing quo; it is also rapidly creating that future across industries and the entire nation.
DESCRIBE VINGROUP Pham Nhat Vuong, a seasoned businessman, is the driving force behind VinGroup. He became the country’s first billionaire by selling instant ramen to Ukrainian consumers. His unrelenting desire to do more brought him back to Vietnam and into the real estate industry, where he successfully expanded both commercial and retail real estate enterprises throughout Vietnam.
From a solid foundation in real estate, he expanded the conglomerate’s reach into a variety of markets, such as a chain of resorts located all over Vietnam, theme parks, artificial intelligence, the medical field, the automotive industry (VinFast), a network of private schools for Vietnam’s elite, and even a college. This new university, known as VinUni, expands on the elite education provided by VinSchools and aims to rank among the best institutions in the world.
I was curious to learn what was actually going on at VinFast behind the scenes, and VinGroup is where it all begins. Vin-related information was wherever we turned, it seemed. a shopping center with the VinCom commercial real estate brand, a VinFast retail store, or a quick charging station alongside the freeway. A VinMec ambulance at the airport and the VinUni smack dab in the middle of what seems like an endless line of VinCom high rise condominium structures.
We visited the VinGroups real estate projects west of Hanoi, where roughly 2,100 acres of construction have turned marshes into affordable yet up-to-date suburban neighborhoods for the middle class. VinGroup isn’t just erecting apartment complexes randomly. To make sure residents have everything they need when they move in, a whole ecosystem of business and residential properties have been developed simultaneously. That covers everything, from hospitals to colleges and universities to dining establishments, amusement parks, and hotels. Since VinGroup’s developments outside of Hanoi have been so successful, provinces all across the country are now contacting VinGroup to request the construction of even more of these developments.
VinGroup is responsible for between 1.5 and 2% of Vietnam’s overall GDP. Rapid growth has elevated the entrepreneur to the status of the nation’s first billionaire in just six short years. According to the staff at VinGroups, this is only the beginning. He envisions making Vietnam and VinGroup global leaders in their respective fields, not simply in Vietnam.
As we concentrate on VinGroup’s automotive division, it is essential to comprehend the conglomerate’s breadth. VinGroup is not just promoting VinFast as a fresh EV endeavor. Instead, it is a logical progression of VinGroup’s unrelenting drive to create a strong, cutting-edge society for Vietnam and beyond. They differ from traditional automotive corporations in that they have a depth and diversity of capital resources. Building brands that enhance the standard of living for consumers in Vietnam and elsewhere is a goal of VinGroup.
VINIFAST VF 8 Continuing along this vein, VinFast intends to flood the market with the VF 8, its first global EV, both in Vietnam and abroad. This CUV targets the most popular car market and guarantees to provide mainstream clients with the premium VinFast experience at an affordable price. While the pre-production build we drove wasn’t the production-ready model, it showed tremendous promise for scale during our time with the car in Nha Trang, Vietnam.
With a 15.6-inch touch screen installed on the dash, the VF 8 feels comfortable right out of the box. Similar to Tesla’s current lineup, all of the car’s essential features and data are displayed on this screen. The software operated smoothly and offered the flexibility to change the vehicle’s drive parameters from eco to sport, the regen from low to standard, and much more. It is exactly what you would expect from a contemporary EV and demonstrates VinFast’s efforts to establish a contemporary brand.
Given that the VF 8 was created by renowned automotive design studio Pininfarina, its aesthetics are flawless. The low-slung cab is covered in soft curves that extend from the prominent VinFast V on the nose. The VF 8 has a contemporary design without alienating too many customers. It has five comfortable seats inside, and the rear seats fold nearly flat to make room for anything from items found at rummage sales to a second trip to Ikea.
However, some slalom testing showed that the combination of the larger tires and the loose suspension translated to more body roll than is typical of battery electric vehicles in this class. Mounted on a pair of aerodynamically effective rims, the ride is comfortable. This is something that could get better in the production edition as VinFast is still actively working to give the VF 8 its final polish. Performance is also targeted at middle-class buyers, with a planned 0 to 60 time of 5.3 seconds, which is quick without sacrificing too much day-to-day efficiency for excessive acceleration out of the grocery store parking lot.
The VF 8 is very reasonably priced, with prices announced at CES beginning at $41,000 in the US and 36,133 in Europe. Our time with the car made it evident that it is a well-equipped EV that should appeal to a wide spectrum of customers around the world at a price they can afford. We will unpack the car more thoroughly in a separate review.
HAI PHONG FACTORY VINFASTS The VF 8 and VF 9 are being produced in VinFast’s new facility in Hai Phong, a city in northern Vietnam, where the company has turned a marshy river delta into a sizable campus for the manufacture of automobiles. With 900 acres, its network of enormous structures resembles a small city far more than a factory.
All over the campus, massive production buildings have already been constructed, each taking up a full city block. Before viewing the automotive press, body shop, general assembly lines, and scooter assembly lines, we began our tour at the administrative building. Expansive operations similar to those we witnessed in the press shop were shown to us inside the white building shells.
VinFast stamps body panels from rolls of raw steel ( video ) using industry-standard Schuler presses, which are surrounded by rows of dies for the many vehicles VinFast manufactures today. Although there weren’t many electric VinFasts scooters or cars in town, we frequently spotted them cruising the streets. All of that is going to change since VinFast has begun gradually shutting down its production lines for internal combustion engines with plans to do so completely by August 31 of this year. That is astounding and shows how swiftly VinFast is working to realize its vision.
We mainly hear from VinFast about its future aspirations in the US and Europe, with a few new retail locations serving as some of the few concrete signs of the brand’s existence. Observing firsthand VinGroup’s explosive growth across so many industries and VinFast’s development completely altered my perspective.
CGI prototypes, inventive marketing, and branding make it relatively simple to launch a brand online. Setting up a factory to create the parts, vehicles, and supply networks needed to enable mass manufacturing is a whole separate matter. Even while it’s not a definite thing, it’s evident that VinFast is quickly developing into a significant player in the electric vehicle market. They may be fresh to the scene—the VinFast e34 won’t even be available in local markets until 2021—but they are slamming the power pedal (not the throttle) to accelerate.
However, VinFast is hard at work expanding its own battery cell production capacity at a new factory located around 190 miles away in Ha Tinh. Currently, VinFast buys lithium-ion battery cells from outside vendors like Samsung. The initial output from this new facility is anticipated to begin within the next two to three months, and as VinFast ramps up, major sections of the new manufacturing property are currently under active development.
CHALLENGES VinGroup undoubtedly wants to rule the globe with its cutting-edge products, but goals cannot change society on their own. The issue at hand is not one of ambition, effort, or even funding because Vin Group appears to have limitless motivation and resources to achieve its objectives. VinGroup has proven it can physically establish a new brand and is working quickly to bring the totally electric future into the present for clients in Vietnam and elsewhere.
The US will be VinFast’s first international market, which raises some important issues. Will consumers trust a brand from a nation they aren’t accustomed to purchasing cars from? Buyers are ready to hop on board with reservations for the plethora of EV companies available today, but can those reservations turn into actual sales? What would American consumers think of a brand coming from Vietnam, a nation that still evokes memories of a protracted war that traumatized a generation?
That’s a lot to ask. Customers have to buy a car from a brand-new corporation, and it’s from a nation that Americans aren’t accustomed to buying cars from. Additionally, VinFast does not have the same level of brand recognition that the larger VinGroup has in its native Vietnam. To inform consumers about the VinFast brand and the larger initiatives of parent firm VinGroup, a big educational campaign is required and is now under way.
With a multi-pronged strategy, VinFast is launching its brand among American customers. The brand is entering the market at a rate that makes me queasy just thinking about it. The construction of a new factory where the VF 8 and VF 9 will be produced for the regional market has begun in Chatham County, North Carolina. They also intend to create a network of retail locations to introduce customers to the brand and VinFast cars. After all, seeing is believing. VinFast is already hiring technicians will finally staff service centers at its initial beachhead areas throughout California and elsewhere.
For the majority of purchasers, electric automobiles themselves still remain rather mysterious. The majority of EV customers today are new to the market and are still unsure about their range, road trips, and how and where to charge them. Although there has been tremendous development in this area recently and the cultural change from gasoline-powered cars to electric vehicles is not unique to VinFast, it nevertheless provides a challenge for VinFast to overcome.
SUMMARY The executive teams at VinGroup and VinFast are rapidly executing on the amazing vision of their founder. In just 21 months, the factory in Hai Phong went from being a muddy area to producing vehicles, and I fully anticipate that they will attempt a similar feat at the new factory they are building in North Carolina. The leadership of VinFast is aware that it is no easy task. They selected the US as their first market outside of Vietnam because they are up for the challenge and are aware that it will be one of the hardest markets to break into globally.
Getting bums in the seats of their automobiles will probably determine the final purchasing decision and the brand’s success. People can decide for themselves if they could envision themselves living in one of these cars permanently after driving them, adjusting the seats, lying down in the rear, and fiddling with the charge port. Customers have the chance to test drive vehicles and ask questions about the brand in-person at VinFast locations. Although viewing brochures and stationary cars is helpful, test drives are the real deal.
These difficulties are serious and must not be underestimated. Will VinFast be able to overcome these and fulfill its goal of offering premium electric automobiles at scale to Vietnamese, American, and European customers at reasonable prices? Only time will tell.
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