According to Asian Briefing, VinFast is by no means the only potential candidate who can “shake” Tesla’s throne. The electric vehicle industry is growing rapidly, and Tesla has to compete with established car manufacturers like Volkswagen, Porsche and the Jaguar Land Rover group, as well as upstarts like Rivian and NIO.
The emergence of new car manufacturers and the expanding supply show that the demand for electric vehicles is increasing. In the UK, experts predict electric car sales will surpass diesel sales for the first time by the end of 2022. However, petrol cars will still be the popular choice in the UK coming years.
The electric vehicle industry has also seen an increase in manufacturers in countries that have not traditionally produced cars. Maybe in the past, Chinese car brands were not so famous, but now the electric car market has a series of products from Chinese manufacturers, including BYD, NIO, Xiaopeng, SAIC and Geely. It can be said that China already has the largest electric vehicle manufacturers in the world.
Currently, the largest market for electric vehicles is Europe, especially in countries like Norway and Iceland, followed by China and the US. China is a fast-growing market for electric vehicles, but like the US, electric vehicle sales are almost unimpressive. In 2020, the share of electric vehicle sales/new car sales in China will be 6% and in the US 2%.
Can VinFast develop in the context of fierce competition?
VinFast may be new to the electric vehicle industry, but the automaker has big goals, producing about one million electric cars in the next 5-6 years. However, whether this goal can be achieved or not is still a question mark when the company will only produce 35,000 cars in 2021. According to CFO David Mansfield, VinFast also aims to be profitable within the next three years.
VinFast said that it is accelerating product production at its factory in Hai Phong to overcome supply problems. In addition, the plan to build a new factory in North Carolina (USA) with an initial investment of $ 2 billion is also being developed by VinFast in phases.
In December 2021, Vingroup started construction of a $174 million battery factory in Vung Ang Economic Zone (Ha Tinh). In the first phase, the company plans to produce 100,000 battery packs per year.
VinFast is also expanding its network and supply chain by 2022. In September 2022, the company signed an agreement with Renesas Electronics Group, a leading supplier of advanced semiconductor solutions. Renesas will provide a wider range of products for VinFast, including SoCs, microcontrollers, semiconductors, etc.
Another factor that could support VinFast’s supply chain growth is Vietnam’s potential for nickel mining. For example, Australian mining company Blackstone Minerals recently took over the Ta Khoa project in Son La province. These deposits contain many of the minerals the lithium battery industry needs.
VinFast currently has two models, VF8 and VF9. According to Asean Briefing, both products have the same range as Tesla’s models, but are much cheaper. The Tesla Model Y and Model X start at nearly $66,000 and nearly $121,000, respectively, while the VF 8 and VF 9 in the US start at $41,000 and $56,000, respectively.
“Expanding to Western markets will likely be the key to VinFast’s success. Even Chinese manufacturers want to expand their reach to Europe and North America” Asean Briefing said.
Tesla’s real rival?
Tesla has to compete with many other electric vehicle manufacturers around the world, one of which is VinFast. Experts highly appreciate the Vietnamese car company because of its service quality as well as its ambition.
“VinFast has many good conditions for development, but only time will tell how the Vietnamese automaker will develop and succeed” Asean Briefing said.
According to Asean Briefing, VinFast has cheaper products than Tesla and other brands, such as Porsche and Mercedes. However, there are other units on the market that offer cheaper electric vehicles.
“VinFast with low-cost electric cars with high technology can completely develop sustainably in the future” emphasized Asean Briefing.
Reference: Asean Briefing
Source: Vietnam Insider