Vinfast, an emerging Vietnamese automaker, has started taking orders for its first EV, the VFe34. The VFe34, a C-segment SUV crossover type, uses a 42kWh battery and can travel 300km on a full charge. The domestic sales price is VND 690 million(about 3.31 million yen). The battery will be provided on a subscription basis (fixed fee service). The monthly fee is set at VND 1.45 million, the same level as the cost of running on gasoline. When the battery’s charge performance drops below 70%, it can be replaced with a new one. This is said to reduce the initial cost for customers and at the same time guarantee the quality risk of the battery.
As a promotion until the end of June, the company will offer a discount of VND100 million and a free battery subscription service for one year. In addition, customers who replace their gasoline-powered cars will receive VND30 million per car from the Vin Group’s Green Future Fund. If they cancel the purchase, the deposit of 10 million dong will be fully refunded. According to Vinfast, 3,692 orders were recorded in 12 hours after the start of orders on the 24th.
The company plans to install more than 20,000 charging stations in 63 provinces and cities across the country by the end of 2021 and is seeking partners for the project. The company is also promoting technical cooperation and signed a memorandum of understanding with Taiwan’s PLG on March 3. The company will establish a joint venture in Vietnam to manufacture all solid-state battery packs for EVs using PLG’s patents and technologies.
Source: JETRO
PSR Analysis: Vietnam’s VINFAST is a home-grown automobile brand that has been long awaited by the Vietnamese people and has attracted a lot of interest. The company is under the Vin Group, which has many businesses including consumer electronics with real estate at its core, but the Vin Group has announced that it will discontinue the development and production of smartphones and televisions. In the future, the organization is expected to focus on the automotive business with Vinfast as the core, and consumer electronics with advanced technology for smarter homes.
They have been restructuring their business in recent years, selling off their retail business and cancelling projects to enter the airline business. In 2020, net sales fell by 15.5% YOY to VND110.5 trillion, and net income by 43.0% to VND4.4 trillion.
The mainstay real estate business was strong, but the tourism and entertainment sectors were down due to COVID-19. This is a critical moment for them to get their automobile business, which involves a large investment, back on track. The EV recharging station network in Vietnam is still in its infancy, and in order for them to increase their EV sales, they need to improve their domestic stations. The success of Vinfast in the domestic EV market is very important because it will prove to other EV manufacturers that they can sell EVs in Vietnam. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
