EV startups are a dime a dozen in recent years, so when a massive conglomerate in Vietnam opened up about plans to start a new EV brand with an IPO to follow, it seemed like little more than the latest chapter in the bumpy road to a fully electric future. This skepticism colors the way we interpret vehicle launches, CGI images, and online specs, so when VinFast invited us out to Vietnam to experience the full VinGroup ecosystem firsthand.
Disclaimer: VinFast paid for travel and accommodations for the author to attend this event.
We experienced the titanic breadth of VinGroup, one of the largest conglomerates in Vietnam and saw its vision manifesting in buildings, vehicles, factories, and employees right in front of us. VinGroup is not merely challenging the status quo with its bold vision for the future, it is building that future across industries and across the country at a speed that boggles the mind.
What is VinGroup?
At the heart of VinGroup is serial entrepreneur Pham Nhat Vuong. He’s Vietnam’s first billionaire and got his start in business selling instant ramen in the Ukrainian market. His relentless drive to do more led him back to Vietnam and into real estate, where he ramped up both commercial and retail real estate operations extremely quickly across Vietnam.
From a stable foundation in real estate, he expanded the conglomerate’s reach into disparate markets including a chain of resorts spread across Vietnam, theme parks, medicine, artificial intelligence, the automotive sector (VinFast), a chain of private schools for Vietnam’s elite and even a college. Dubbed VinUni, this new university builds on the premium schooling at VinSchools with aspirations to become one of the finest schools in the country.
I was eager to see what was really going on behind the scenes at VinFast and that all starts with VinGroup. It seemed like every corner we turned, there was something Vin related. A VinCom commercial real estate branded shopping mall, a VinFast retail location or fast charging installation along the highway. A VinMec ambulance at the airport and the VinUni butting up against seemingly endless rows of VinCom high rise condo buildings.
We toured VinGroup’s real estate developments outside of Hanoi, where nearly 2,100 acres of developments have transformed marshland into attainable yet modern suburban communities for the middle class. VinGroup isn’t just plopping down apartment buildings in isolation. They have built out a full ecosystem of commercial and residential properties in tandem to ensure residents have what they need when they move in. That includes everything from medical centers to schools, universities to restaurants, theme parks and resorts. VinGroup’s developments outside Hanoi have been so successful that provinces across the country are now reaching out to VinGroup to solicit even more of these developments across the country.
In total, VinGroup accounts for somewhere between 1.5 and 2% of Vietnam’s entire GDP. In just 6 years, the rapid expansion has catapulted the founder into the position as the first billionaire in the country. Talking to VinGroup’s teams, this is just the beginning. He has visions of establishing Vietnam and VinGroup as leaders in their industries not just within Vietnam but around the world.
Understanding VinGroup’s breadth is critical as we focus in on the automotive arm of the conglomerate. VinGroup is not merely pushing out VinFast as a new EV venture. Instead, it is a natural extension of VinGroup’s relentless push to build out a robust, futuristic society for Vietnam and beyond. They have a depth and diversity of capital resources that sets them apart from traditional automotive companies. VinGroup is building brands that improve the quality of life for customers in Vietnam and beyond.
The VinFast VF 8
Extending this train of thought, VinFast plans to blitz customers in Vietnam and around the world with its first global EV, the VF 8. This CUV is aimed at the most popular vehicle segment and promises to deliver the premium VinFast experience to mainstream customers at a reasonable price. We spent some time with the car in Nha Trang, Vietnam and while the pre production build we drove isn’t the production ready version, it carries significant promise for scale.
Right out of the box, the VF 8 feels familiar, with the user experience revolving around a dash-mounted 17″ touch screen. All of the critical functions and information from the car lives on this display, much like in Tesla’s current lineup. The software flowed well, providing the capability to adjust drive characteristics of the vehicle from eco to sport, regen from low to standard, and much more. It’s what you would expect from a modern EV and makes it clear that VinFast is building out a modern brand.
The aesthetics of the VF 8 are on point, as they should be, having come from famed automotive design house Pininfarina. From the bold VinFast “V” on the nose, gentle curves sweep over the low slung cab. The VF 8 looks modern without isolating too many buyers with an edgy design. Inside, it seats 5 comfortably, with rear seats that fold to a nearly flat position to accommodate anything from garage sale findings to another trip to Ikea.
Mounted on a set of aerodynamically efficient rims, the ride is comfortable, though a bit of slalom testing revealed that the combination of the fatter tires and loose suspension translated to more body roll than is typical of battery electric vehicles in this class. VinFast is still actively putting the final polish on the VF 8, so this is something that may improve in the production version. Performance is similarly geared towards mainstream consumers, with a planned 0 to 60 of 5.3 seconds that’s peppy without blowing too much day to day efficiency on unnecessary acceleration out of the grocery store parking lot.
On the pricing front, the VF 8 is extremely attractive, with a pricing announced at CES of $41,000 in the US and €36,133 in Europe. We’ll unpack the vehicle more completely in a separate review, but it was clear from our time in the vehicle that it is a well-appointed EV that should appeal to a wide range of consumers around the world at a price they can afford.
VinFast’s Hai Phong Factory
The VF 8 and VF 9 are being built at VinFast’s new factory in the northern Vietnamese city of Hai Phong, where VinFast transformed a marshy patch of river delta into a sprawling automotive production campus. At 900 acres in size, its complex of oversized buildings feels much more like a small city than a factory.
Oversized factory buildings have already been built up across the campus, with each filling entire city city blocks. We started our visit in the administrative building, before visiting the scooter general assembly line, automotive press, body shop, and general assembly lines. Inside the white building shells, expansive operations like we saw in the press shop opened up before us.
VinFast is using the industry standard Schuler presses to stamp out body panels from rolls of raw steel (video), with rows of dies flanking the equipment for the wide range of vehicles VinFast produces today. Out around town, we regularly saw VinFast’s vehicles and scooters roaming the streets, though only a handful of those were electric. That’s all about to change, as VinFast is already ramping down its internal combustion production lines, with plans to fully shutter them by August 31 of this year. That’s staggering and indicative of just how quickly VinFast is moving to bring its vision to reality.
In the US and Europe, we’re really only seeing a lot of talk from VinFast about future plans with a handful of new retail stores as some of the only hard evidence of the brand’s existence. Seeing the rapid progress of VinGroup across so many sectors and the progress with VinFast in person changed all of that for me.
It’s relatively easy to spin up a brand online with CGI prototypes, creative marketing, and branding. It’s a completely different thing to stand up a factory to build the components, vehicles, and supply chains to support production at scale. While not a sure bet, it is clear VinFast is rapidly evolving into a serious competitor in the electric vehicle space. Sure, they’re new on the scene, with the VinFast e34 only hitting local markets in 2021, but they are absolutely pounding on the power pedal (not the throttle) to ramp up.
Today, VinFast is purchasing lithium-ion battery cells from external suppliers like Samsung, but they are hard at work building their own battery cell production capacity at a new factory some 190 miles away in Ha Tinh. They expect the first production from this new factory in the next 2-3 months and there were entire sections of the new factory plot actively under construction as VinFast continues to ramp.
VinGroup clearly has aspirations to conquer the world with its futuristic products, but hopes and dreams alone can’t transform society. The question now is not one of ambition or effort or even financing as Vin group seems to have endless drive and capital to accomplish its goals. VinGroup has demonstrated it can physically build up a new brand and is rapidly pushing to pull the fully electric future forward into today for customers in Vietnam and beyond.
The US will be VinFast’s first global market, which brings some serious questions right to the forefront. Will buyers put trust in a completely new brand from a country they’re not used to buying cars from? EV startups are a dime a dozen these days and buyers seem ready to jump on board with reservations, but will those placeholders translate to actual sales? What will American buyers think about a brand from Vietnam, a country that still conjures images of a protracted war that left a generation traumatized?
That’s asking a lot. Not only do customers have to purchase a vehicle from a completely new company, but it’s from a country Americans aren’t used to purchasing vehicles from. VinFast also does not have the brand recognition that the broader VinGroup gives it back home in Vietnam. A massive educational campaign is needed and in fact, is already underway, to share the VinFast brand and the broader efforts of parent company VinGroup with customers,
VinFast is introducing its brand to American consumers with a multi-pronged approach that has the brand charging into the country at a clip that has me dizzy just thinking about it. They are starting work on a new factory in Chatham County, North Carolina where they will build the VF 8 and VF 9 for the local market. At the same time, they have plans to establish a network of retail stores to introduce buyers to the brand and VinFast vehicles. Seeing is believing, after all. Finally, VinFast is already hiring technicians to staff up service centers at its early beachhead markets across California and beyond.
Electric vehicles themselves are still a bit of a mystery to most buyers. Most EV buyers today are new to the segment and still uncertain about how and where to charge them, range, and road trips. The cultural shift from petrol vehicles to zero emission EVs is not unique to VinFast and significant progress has been made in the space in recent years, but it represents just one more hurdle for VinFast to tackle along the way.
The leadership at VinGroup and VinFast are building out the impressive vision of their founder at a clip that would make anyone dizzy. The Hai Phong factory was taken from a muddy field to churning out vehicles in just 21 months and I full expect them to attempt a similar feat at the new factory they’re building in North Carolina. It’s no small feat and VinFast’s leadership understands that. They chose the US as their first market outside Vietnam because they knew it would be one of the most challenging markets in the world to penetrate and are eager for the challenge.
Ultimately, the purchase decision and success of the brand will likely boil down to getting butts in seats of their vehicles. After driving the vehicles for themselves, adjusting the seats, laying down in the back, and playing with the charge port, people can see for themselves if they could see themselves in one for the long term. VinFast stores give customers the opportunity to experience the vehicles and ask questions about brand the brand first hand. Seeing brochures and static vehicles is important, but test drives are the secret sauce.
These challenges are significant and cannot be understated. Can VinFast overcome them and succeed in its mission to bring affordable premium electric vehicles to Vietnamese, American, and European customers at scale? Time will tell.
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