The electric vehicle industry is booming, but competition is fierce. Geopolitical turmoil, economic fluctuations, and shifting consumer confidence add further complexity. To navigate these challenges, VinFast has adopted a multi-product, multi-market strategy, a unique approach that’s granting the Vietnamese electric car company a significant advantage and propelling its influence in the global auto industry.

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

Separately, three U.S. senators from auto-producing states urged the Biden administration to raise import tariffs on Chinese electric vehicles, citing national security risks. This latest effort by lawmakers adds to growing pressure to shield the domestic auto industry.

Rising geopolitical tensions and the specter of trade wars cast a long shadow over the burgeoning electric vehicle (EV) industry, according to recent developments. This environment could create fertile ground for car manufacturers, like Vietnam’s VinFast, that employ a diversified “multi-product, multi-market” strategy. Such an approach could prove advantageous in navigating the complex geopolitical landscape.

List of 50 most influential people in the auto industry voted by MotorTrend. Photo credits: MotorTrend.

The advantage of VinFast’s multi-market approach

Washington has effectively built a fortress to keep out Chinese EVs. Former President Donald Trump’s 25 percent tariff on Chinese auto imports remains in place under the Biden administration. Additionally, the Biden administration has excluded Chinese EVs from federal “Buy America” tax credits, which can significantly lower purchase prices for consumers.

These steps have made it virtually impossible for Chinese manufacturers to compete with vehicles built in the U.S. or imported from friendly nations.

Meanwhile, VinFast is demonstrating the effectiveness of its multi-market strategy as the global demand for sustainable transportation surges. In July of last year, construction officially began on VinFast’s first factory in North Carolina, boasting a production capacity of 150,000 vehicles annually. This U.S. manufacturing presence will enable VinFast models to qualify for federal tax credits, making them more competitive in the American market.

However, Vietnamese electric car company VinFast’s ambitions extend beyond the United States. This global push was recently underscored 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 the groundbreaking work underway at VinFast.

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

Further solidifying its presence, VinFast announced plans to build a manufacturing facility in Indonesia, with a projected annual capacity of 50,000 cars. This strategic move positions VinFast to capitalize on the region’s surging demand for electric vehicles.

This explains the strong government support VinFast received upon market entry. Beyond simply selling a diverse and affordable range of electric vehicles to promote electrified transportation, the Vietnamese EV company sees an opportunity to contribute to Indonesia’s long-term EV ambitions. This could involve strengthening the supply chain for EVs and developing a skilled workforce to support the industry’s growth.

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

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

Joining the list of the 50 most powerful people in the world’s auto industry has shown the level of influence of VinFast CEO in the global auto sector and that the electric vehicle trend is irreversible. VinFast’s influence will multiply according to the car company’s global expansion plan, navigating fluctuations in the electric car industry in general.

Diverse products and smart sales strategies

But VinFast’s global ambitions extend beyond market share. The Vietnamese carmaker, under its founder’s leadership, is playing a key role in pushing the electric vehicle revolution forward on a global scale, overcoming various headwinds and uncertainties.

Rising interest rates, a weakening global economy, and potentially declining consumer confidence could dampen demand for EVs. This is evident in recent moves by Tesla, the world’s leading EV manufacturer, which has resorted to price reductions on its vehicles and services over the past year to maintain sales momentum.

“I’m worried about the high interest rate environment that we’re in,” Musk told investors during the EV maker’s earnings call last year. “I just can’t emphasize it enough that for the vast majority of people, buying a car is about the monthly payment. And as interest rates rise, the proportion of that monthly payment that is interest increases naturally. So if interest rates remain high, or they go even higher, it’s that much harder for people to buy the car.”

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

VinFast embodies a comprehensive electric mobility ecosystem, encompassing electric buses, scooters, and cars. Its passenger cars cater to diverse consumer needs and budgets, offering a spectrum from mini EVs to full-sized electric SUVs. At CES 2024, VinFast unveiled its exciting midsize pickup truck concept and the innovative DrgnFly electric bike. Further solidifying its commitment to accessibility, the company is aggressively expanding its global dealership network, aiming to reach 400 points of sale by the end of 2024.

In addition to manufacturing, VinFast is aiming to become a comprehensive mobility solutions provider, offering battery leasing options and a unique battery-as-a-service subscription model. Notably, VinFast’s battery leasing policy has the potential to drive sales significantly in new markets. This mechanism brings the upfront price of VinFast vehicles and the monthly running cost down in line with or even more competitive than many gas-powered vehicles on the market today.

As the world embraces sustainable transportation, a dynamic landscape of geopolitical shifts, economic fluctuations, and rising interest rates can create uncertainty for car buyers. To navigate these challenges, VinFast’s multi-market, multi-product strategy is proving to be a powerful tool for the Vietnamese electric car company to solidify its influence in the global auto industry.

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

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