“VinFast has once committed to cease selling internal combustion engine vehicles before 2035, and we are proud to announce that we have achieved this significant milestone much earlier than anticipated,” said Madame Le Thi Thu Thuy, Global CEO of VinFast, during the panel discussion on “Sustainable Supply Chain Resilience: Navigating Global Disruption” at the Sustainable Trade Forum at COP28.
Proactively promoting localization and modernization is the key to success
Could you please share VinFast’s strategy to optimize the efficiency of the supply chain and ensure sustainability?
At VinFast, we have made significant improvements in supply chain management to address current challenges. The key principles we focus on include localization, near-shoring, diversification, and modernization. For instance, we have reached a localization rate of up to 60 percent, and be able to produce 47 percent of materials in-house. Additionally, we have established a supplier park within our manufacturing complex to optimize the manufacturing process.
Furthermore, our success hinges on the capacity to maintain existing supplier relationships and establish new supplier agreements. These suppliers play a crucial role in providing essential components and technology for our vehicles.
Additionally, we place special emphasis on modernization by leveraging cloud computing technology and data analytics from technology units within our ecosystem. At Vingroup and VinFast, this is made possible by our ecosystem of technology subsidiaries such as VinAI, VinBigData, VinBrain, etc. who continuously develop and test new technologies to support VinFast and other subsidiaries in our ecosystem.
From your perspective, what factors contribute to making the supply chain more sustainable and flexible in the current global context?
Recent global disruptions such as the COVID-19 pandemic and ongoing geopolitical tensions require businesses to proactively establish sustainable and resilient supply chains. Companies should focus on embracing the principles of circular economy, leveraging advanced technologies such as AI and blockchain to enhance transparency and traceability of the supply chain. This will help mitigate negative impacts on the environment and society, particularly by minimizing carbon footprints.
Furthermore, businesses can optimize transportation and logistics processes by using software to choose routes and alternative transportation modes such as railways, maritime routes, or electric vehicles to reduce fuel consumption and emissions. This can contribute to a more sustainable and efficient supply chain.
So how has VinFast implemented these principles?
We have applied the principle of transitioning from linear production to a circular economy, aiming to reduce waste and resource consumption. Simultaneously, we prioritize sourcing materials and products from suppliers who demonstrate environmental responsibility. For example, our EV batteries are responsibly sourced from leading battery companies, boasting up to 95% recyclability. VinFast applies a battery leasing model to ensure appropriate management of the battery. When the battery capacity dips below 70%, we replace the battery and use the existing battery as an energy storage unit. Furthermore, VinFast has established a global partnership with Li-Cycle (a well-established Canadian Company) for battery recycling. Efforts to enhance the recyclability of the battery and the lifespan continue to be researched.
Every movement commences with a shift in perspective
VinFast has been recognized as one of Vietnam’s pioneering enterprises that prioritizes the training of high-quality human resources. How has VinFast worked to build a sustainable culture within its internal workplace?
At Vingroup and VinFast, we recognize the significance of educating and training employees on sustainability practices and encourage them to adopt eco-friendly behaviors in the workplace. Particularly at VinFast, we have implemented a Sustainability Framework (ESG) aligned with the Global Reporting Initiative (GRI) to provide training on sustainability practices for personnel at all levels, while adhering to the United Nations Sustainable Development Goals (UNSDGs) as part of our long-term strategy.
Additionally, we have established Key Performance Indicators (KPIs) at department and company levels to track and measure progress toward sustainability goals. This can help identify areas for improvement and drive continuous enhancement.
Could you share more about VinFast’s plans in maintaining sustainable development goals in the future?
VinFast envisions a sustainable future for the global community through the contribution of green and safe transportation. At the COP26 conference, VinFast committed to ceasing the sale of internal combustion engine vehicles before 2035, and we are proud to have achieved this significant milestone much earlier than anticipated. During COP26, VinFast also joined the Zero Emission Vehicle (ZEV) Pledge, committing to achieve net-zero emissions by 2040 (10 years earlier than the COP26 target for achieving zero air emissions by 2050). Our commitment involves the Climate Transition Adaptation Plan, aiming to reduce greenhouse gas emissions in scope 1 and scope 2 GHG emissions by 7% per annum. We aim to capture our scope 3 emissions in 2024 and have initiated the installation of solar panels with scalability to access renewable energy at our manufacturing complex in Hai Phong.
Will Davis is a freelance writer covering economic, automobile, and lifestyle topics in Vietnam.
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