Battery Leasing Spurs VinFast’s EV Offensive

Vietnam’s fast-moving OEM will sell its new electric SUVs but lease their Li-ion batteries.

Pininfarina executed the exterior design of VinFast’s mid-sized SUVs which are not part of the company’s battery-leasing scheme in the U.S. (VinFast)

VinFast, Vietnam’s first automotive startup, clearly takes its name seriously. Barely two months after introducing its first two electric vehicles (EVs), the automaker pulled the wraps off three more EVs during the 2022 CES while confirming its aggressive sales and production plans. All but the smallest of the five EVs will go on sale in the U.S., company CEO Le Thi Thu Thuy (below) confirmed during an interview with SAE Media. Thuy also revealed that she is in the final stages of determining which of three potential sites will be chosen as the location for a new assembly plant VinFast plans to open in the U.S. in 2024.

The company has been moving at hyperspeed since it was founded in June 2017. Thuy stated that VinFast “will become the first auto company in the world to cease production of gas-powered vehicles and move entirely to an electric-powered fleet.” In addition, VinFast is partnering with ZF to incorporate the Tier 1 supplier’s so-called “Level 2+” (enhanced SAE Level 2) ADAS suite in the new EVs when they launch in mid-2022.

Thuy also announced a novel battery leasing scheme in the U.S. for its two largest SUVs, the $41,000 VF8 and $56,000 VF9. VinFast will sell buyers the SUVs – but lease the vehicles’ lithium-ion batteries. Several different lease packages will be offered, depending upon the mileage buyers expect to clock. Specific details haven’t yet been announced, but the automaker did note it will replace battery packs should they decline to less than 70% of their original range in customer use. VinFast has begun taking $200 reservations for the VF8 and VF9 model and expects to begin deliveries in late 2022. Initial production will take place at a sprawling manufacturing complex along the harbor in Haiphong, Vietnam.

Thuy said the company is “very close” to making a decision on which of three possible locations will be chosen for VinFast’s U.S. factory. The goal is to break ground and get into operations quickly in Haiphong – which would mean opening in late 2023, if it holds to schedule. Production capacity will be around 250,000 vehicles annually. In addition to the SUVs, Vinfast’s U.S. factory also is slated to product batteries and, in small volume, electric buses.

Asked about the challenges of breaking into the crowded U.S. market, the CEO asserted that “The recognition of Vietnam is great,” though she acknowledged the country is “not well-known for technology.” To overcome initial skepticism, she said VinFast will focus on delivering high-contented products at a relatively low price, while also offering a 10-year warranty to overcome any questions about the quality of its vehicles – a strategy that helped a nascent Hyundai/Kia group establish its brand in North America.