How VinFast’s founder joins the auto industry’s powerhouse

The electric car industry is booming, but the competition is fierce. Geospatial turbulence, economic changes, and changing consumer confidence add to the complexity. To meet these challenges, VinFast has adopted a multi-product, multi-market strategy, a unique approach that gives the Vietnamese electric car company great leverage and continues its influence in the global automotive industry.

In a move that echoed concerns in the United States, the European Commission announced on March 7 that it was opening an investigation into whether Chinese battery-powered vehicles are being unfairly subsidized by the Chinese government.

Separately, three US senators from auto-producing states urged the Biden administration to increase import tariffs on Chinese electric vehicles, citing national security risks. This latest effort by lawmakers adds to the growing pressure to protect the country’s auto industry.

Rising geopolitical tensions and the specter of a trade war are casting a long shadow over the growing electric vehicle (EV) industry, according to recent developments. This environment can create fertile ground for automakers, such as Vietnam’s VinFast, which uses a “many products, many markets” strategy. Such a perspective can be useful in navigating complex geopolitical environments.

Advantage of VinFast’s multi-market approach

Washington has effectively built a wall to block Chinese EVs. Former President Donald Trump’s 25 percent tariff on auto imports from China remains in place under the Biden administration. Additionally, the Biden administration has removed Chinese EVs from the federal “Buy American” tax credit, which could lower purchase prices for consumers.

These measures have made it difficult for Chinese manufacturers to compete with cars built in the United States or imported from friendly countries.

At the same time, VinFast demonstrates the effectiveness of its multi-market strategy as the global demand for sustainable travel increases. In July of last year, construction officially began on the first VinFast plant in North Carolina, boasting a production capacity of 150,000 vehicles annually. This US manufacturing presence will enable VinFast’s products to qualify for federal tax credits, making it more competitive in the US market.

However, the ambitions of Vietnamese electric car company VinFast extend beyond the United States. This global push was recently highlighted by the inclusion of VinFast’s chairman and CEO, Pham Nhat Vuong, on the prestigious 2024 MotorTrend Power List. Notably, Vuong is the only honoree from Southeast Asia, highlighting his visionary leadership and ongoing groundwork at VinFast.

VinFast’s international expansion extends beyond North America and Europe. The company recently made a strategic move to Indonesia, a Southeast Asian powerhouse with a thriving automotive market. VinFast launched a series of right-hand drive electric vehicles specifically for the Indonesian market.

To further strengthen its presence, VinFast announced plans to build a manufacturing facility in Indonesia, with an estimated annual capacity of 50,000 vehicles. This strategic move gives VinFast the opportunity to capitalize on the demand for electric vehicles in the region.

This explains the strong government support that VinFast received when entering the market. More than just selling a variety of affordable electric vehicles to promote electric transportation, the Vietnamese EV company sees an opportunity to contribute to Indonesia’s long-term EV aspirations. This could involve strengthening the supply of EVs and developing a skilled workforce to support the growth of the industry.

VinFast has also officially established its electric vehicle base in India, the world’s third largest automotive market. “The EV manufacturing unit in Thoothukudi fulfills Stalin’s vision of decentralized growth, which will create jobs for highly skilled workers in backward regions,” Industries Minister TRB Rajaa said at the ground-breaking ceremony.

“Now, with big names like VinFast joining the list of electric car manufacturers in Tamil Nadu, we are proud that the Prime Minister is getting closer to his goal of making Tamil Nadu the electric car capital of South Asia, not just India,” Mr. Rajaa insisted.

Joining the list of the 50 most powerful people in the world’s automotive industry has shown the level of influence of the CEO of VinFast in the global automotive industry and that the trend of electric vehicles is irreversible. VinFast’s influence will increase in line with the car company’s global expansion plan, a shift in the evolution of the electric vehicle industry as a whole.

Different products and smart sales strategies

But VinFast’s global ambitions extend beyond market share. The Vietnamese car manufacturer, under the leadership of its founder, is playing an important role in pushing forward the electric car revolution on a global scale, overcoming various difficulties and doubts.

Rising interest rates, a weakening global economy, and a possible decline in consumer confidence could reduce demand for EVs. This is evident in the recent actions of Tesla, the world’s largest EV manufacturer, which has decided to reduce the price of its cars and services over the past year in order to maintain sales momentum.

“I’m concerned about the high interest rate environment we’re in,” Musk told investors during the EV maker’s earnings call last year. “I can’t stress enough that for most people, buying a car is a monthly payment. And when interest rates go up, the ratio of those monthly payments that are interest usually goes up. So if interest rates stay high, or go up even more , it is more difficult for people to buy a car.

To promote sustainable green mobility and ensure revenue streams regardless of geographic or macroeconomic changes, VinFast has created a competitive advantage by developing a range of electric transportation products. Along with that are flexible sales policies and a unique battery leasing program to help make electric vehicles more accessible.

VinFast includes a wide range of electric mobility systems, including electric buses, scooters, and cars. Its passenger vehicles meet a variety of consumer needs and budgets, offering a spectrum from compact EVs to full-size electric SUVs. At CES 2024, VinFast unveiled its exciting mid-size cargo truck concept and the DrgnFly electric bike. To further strengthen its commitment to accessibility, the company is expanding its global sales network, aiming to reach 400 sales points by the end of 2024.

In addition to manufacturing, VinFast aims to be a full-service mobility provider, offering battery leasing options and a unique battery-as-a-service subscription model. In particular, VinFast’s battery rental policy has the potential to significantly drive sales in new markets. This process results in VinFast vehicles’ premium prices and monthly operating costs that are in line with or even more competitive than most gas powered vehicles on the market today.

As the world embraces sustainable transportation, the changing landscape of geographic shifts, economic changes and rising interest rates can create uncertainty for car buyers. To face these challenges, VinFast’s multi-product market strategy seems to be an effective tool for the Vietnamese electric vehicle company to strengthen its influence in the global automotive industry.

Will Davis is a freelance writer covering economic, automotive, and lifestyle topics in Vietnam.

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