Vietnam’s electric vehicle (EV) maker VinFast has announced its plan to ship its first EVs to Europe this year, as the European Union (EU) considers imposing tariffs on its Chinese rivals.
VinFast, which is listed on Nasdaq, plans to deliver about 3,000 of its VF8 crossovers to France, Germany and the Netherlands in the fourth quarter of this year from its factory in northern Vietnam, according to a person familiar with the plan. The source declined to be named because these details were not yet public.
The company’s CEO, Le Thi Thu Thuy, told Reuters that the VF8 SUV has already been approved by a European regulator as compliant with EU standards, and can be sold within the 27-country bloc. The company is also completing the procedures to obtain the voluntary Euro NCAP safety rating, she added.
Thuy said that the company’s other models VF6, VF7, and VF9 would be launched in the European market next year. The company had shipped about 2,100 EVs earlier this year to the United States and planned to ship more VF9 models.
VinFast’s expansion into Europe is part of a global plan that includes building new factories in the United States and in Indonesia and targeting also India, the Middle East, Africa and Latin America.
VinFast’s competitive edge
VinFast’s plan to enter the European market comes at a time when the EU is investigating whether Chinese EV makers are dumping their products at artificially low prices. The EU probe could result in punitive duties on China-made EVs, which could create a gap in the market for VinFast.
VinFast’s VF8 model starts at 50,990 euro ($54,218) in France. The China-made Tesla Y model, which is also threatened with EU tariffs, starts from 46,000 euros.
VinFast claims that its EVs are equipped with advanced features such as self-driving technology, wireless charging and smart cockpit. The company also says that its EVs are designed with Vietnamese cultural elements and cater to local preferences.
VinFast’s challenges
VinFast, which is a subsidiary of Vietnam’s largest conglomerate Vingroup, faces several challenges in its global expansion. The company is still loss-making and has repeatedly revised its targets. The company had previously aimed to deliver 700 cars to Europe by last July, but failed to meet that goal.
VinFast also faces competition from other established and emerging EV makers, such as Tesla, Volkswagen, Hyundai, Nio and Xpeng. The company will have to prove that its EVs can meet the quality and safety standards of different markets and win over customers’ trust and loyalty.
VinFast will also have to deal with the supply chain disruptions caused by the COVID-19 pandemic, which has affected the production and delivery of EVs worldwide. The company will have to secure enough batteries, chips and other components for its EVs amid global shortages.
