The story of VinFast, the Vietnamese electric vehicle manufacturer, sounds like a modern-day fairy tale: In just five years, the company has grown from an unknown start-up to a serious challenger to big names such as Tesla, Hyundai and Volkswagen. However, behind this rapid rise are not only innovation and courage, but also investments worth billions, great visions and controversial decisions. DIGISUSTAIN team member Jon-Matteo Brüggenwerth traveled to Vietnam in the summer to see the company’s success story for himself.
From pasta entrepreneur to billionaire with an environmental mission
Pham Nhat Vuong, the founder of VinFast and the richest man in Vietnam, is the architect of VinFast. His journey began in the 1990s in Ukraine, where he made a fortune with instant noodles before returning to his native Vietnam. Today, Vuong heads Vingroup, a huge conglomerate that includes real estate, retail and healthcare. With the founding of VinFast in 2017 and the production of the first vehicle in 2019, he ventured into one of the most competitive markets in the world.
Vuong’s goal is ambitious: To establish Vietnam as a global player in the electric vehicle market, focusing on sustainable mobility. His commitment goes far beyond entrepreneurial goals – Vuong has announced that he will invest his entire fortune in VinFast in order to realize his dream.
VinFast is taking a unique approach to making electric vehicles more affordable: Customers purchase the vehicle at a comparatively low entry-level price – for example, the VF 8 costs from 40,700 dollars in the USA – and also take out a battery subscription. This model costs around 130 dollars per month and guarantees that batteries will be replaced as soon as their capacity falls below 70 %. While this concept is intended to lower cost barriers, it remains unclear whether consumers will accept such a subscription model in the long term.
Global ambitions and challenges
VinFast has big expansion plans. The company is aiming to gain a foothold in Europe and, in collaboration with Bosch, has created access to a network of over 700,000 charging stations in 30 countries. VinFast is also pursuing ambitious goals in the USA: The construction of a factory in North Carolina is intended to increase production capacity to 250,000 vehicles per year.
But the challenges cannot be overlooked: The vehicles often receive poor reviews from customers and the media. In Vietnam, a critical blogger was arrested following a negative review. VinFast’s share price plummeted dramatically on the stock market. After peaking at over 70 dollars in August 2023, the share price fell to around 4.50 dollars.
The demand for electric vehicles is increasing worldwide, as a McKinsey survey shows: Almost 80% of European car buyers are considering buying an e-vehicle. However, in a market dominated by established giants such as Tesla, VinFast must continue to develop its strategy and product quality in order to remain competitive.
Pham Nhat Vuong’s unwavering determination
Pham Nhat Vuong remains optimistic and is prepared to risk everything. “Until I run out of money,” he replied in an interview when asked how far he was prepared to go. His determination reflects the resilience of Vietnam – a country that has proven time and again that it is “as flexible as bamboo” and can hold its own even in difficult times.
The next few years will show whether VinFast can consolidate its position in the global electric vehicle market. But one thing is certain: this company will continue to make headlines – whether as an innovative automotive pioneer or as an example of the risks associated with ambitious visions.
Sources:
Manager Magazin, Manager Magazin 2