Expert: VinFast uses Vietnamese to run its electric car’s trial but aims to sell in US

The VinFast VF e34 electric car model was opened for sale by the company on March 24, 2021.

Billionaire Pham Nhat Vuong’s VinFast car company announced on its website on March 24 that it started selling Vietnam’s first smart electric car with the model name VF e34.

Information from the company said that VF e34 applies artificial intelligence and allows Vietnamese voice control, regardless of region.

VinFast said that from now until the end of June, this model has a preferential price of VND590 million ($25,300) because buyers only pay for the car without the battery pack, saving VND100 million.

According to this purchase and sale mechanism, although the battery pack is still mounted on the car, the customer will not buy, instead, they pay the monthly rental of the battery at a fee of VND1.45 million.

Vingroup’s car company estimates that the monthly battery rental cost is equal to the cost of refueling if compared to traditional cars. According to VinFast, VF e34 will start appearing on Vietnamese roads in November 2021. Vehicles are warranted for 10 years.

In less than a day of opening, nearly 4,000 people ordered a new model of VinFast, a record in Vietnam, according to reports of many domestic newspapers such as Tien Phong, Thanh Nien, and Nguoi Lao Dong.

Experts Truong Quy Hoang Phuong of BMW Group in Germany commented to VOA that the introduction of VinFast into electric car production is the fastest way to catch up with the development of the automobile industry in the world.

Currently, an expert on research and development of new technology at BMW, Mr. Phuong analyzes that traditional car manufacturers have a history and reputation from dozens to more than 100 years, competing with them extremely difficult. But the electric car is a new field, a new market, open to all brands, young or old.

Mr. Phuong added about the opportunities and advantages for VinFast:

Electric cars are new land, have fewer mechanical parts, are easier to assemble, easier to train workers, and easier to program. VinFast started to compete from the beginning with other manufacturers, so there are more opportunities.

A promotional photo of VinFast’s VF e34

The Vietnamese expert working for BMW predicts to VOA that the main market that VinFast is really targeting is not in Vietnam:

As they claim, they want to enter the US market and then to Europe. However, in order to enter those markets, in the host country market, they must have some experimentation first. Thus, in Vietnam, VinFast wants to promote, wants to use people to test their new products without having to pay. Any new product, in addition to being tested under experimental conditions, must also be tested under real consumer conditions. VinFast is looking to use local people to conduct these trials.”

Considering the VF e34 parameters announced by VinFast, from professional experience, Mr. Phuong compared with an equivalent French model, the Renault Zoe ZE40, to point out the strengths and weaknesses of the first electric car which is about to be launched by the Vietnamese car company.

BMW experts pointed out to VOA that both cars use batteries with roughly the same capacities of 41 and 42kWh, but the French Zoe has a weaker engine (only 85kW) and has less wind resistance (lower than the car) but only has a maximum range of 317 km per charge.

Therefore, it is impossible for Vietnam’s VF e34 with an engine that is 25% stronger (110kW) and 5 cm taller to run 300 km, expert Truong Quy Hoang Phuong said.

With his expertise, Mr. Phuong said that under ideal testing conditions, VF e34 with a 42kWh battery can only run at a maximum of 240-250km. In real terms, it is necessary to reduce 10-20% more.

This is a problem with VinFast’s electric cars because the current standard in the market is that the car must run from 350 km or more. The technical problem of VF e34 is that the battery is quite small and the car cannot run much distance,” Mr. Phuong said.

Another note about this car for future owners, according to BMW experts, is the infrastructure for charging the batteries.

In February, VinFast announced that it plans to deploy more than 2,000 charging stations with more than 40,000 charging ports for electric motorcycles and electric cars this year.

These stations will be located in the parking lots of locations in central provinces and cities such as apartments, office buildings, shopping malls, supermarkets, bus stations, public parking lots, schools, and big hotels.

However, with the current status of fast charging stations, while it takes 25 hours to fully charge the 42kWh battery, with a conventional 230 Volt power outlet, expert Truong Quy Hoang Phuong warned.

In order to shorten the charging time, Mr. Phuong analyzed that the owner must install an additional current box from 10 to 16 Ampere to fully charge after 15 hours, which is still too long; or have to install a 3-phase 32A power line to fully charge in 2 hours, but it will not be easy for households to install 3-phase electricity in Vietnam.

VinFast says it will build 2,000 electric car charging stations across Vietnam by 2021.

The cost of installing the charging box and buying the power cord is how much, the person planning to buy a car should also find out before making a decision,” the BMW expert advises, and asks the question:

The company said that the car is already booked in November, I don’t understand what the people who book the car will do with that car if they have to charge up to 25 hours at home every day to go without any other charger?”

Still BMW expert further analyzes that the VinFast separating the battery value and charging the battery rental is actually a psychological blow to the customer, but in fact, the customer will buy the battery pack on installment.

VinFast has a battery subscription price of VND1.45 million. If we multiply this VND1.45 million by 120 months, or 10 years of using batteries, we get VND174 million until the battery must be replaced. That means, in essence, VinFast sells this battery pack on an interest rate installment payment to the buyer, because the original price of this battery pack purchased by VinFast is estimated at about $7,000,” said expert Truong Quy Hoang Phuong to VOA.

This nominal rental of batteries can lead to problems if the owner sells the car to others before the 10-year period has not expired, Phuong said.

In addition to the purchase and sale of car bodies between the old car owner and the new owner, the two sides also have to transfer the battery lease contract and can only do it through VinFast. Besides, the buyer of a used car will wonder because the battery is no longer new, the charger will no longer have 100% capacity as originally,” Mr. Phuong raised concerns.

Another more notable issue, according to BMW experts, is that if the car owner causes the car to damage car and the damaged battery must be replaced, what is the cost of replacing the battery in this case? There is no information from VinFast.

Mr. Phuong said the battery rental model used to work in Europe but was canceled due to shortcomings.

Looking to the future, BMW’s research and development expert said that while VinFast chose to develop an electric car as a suitable direction with many opportunities to keep up with the world automobile industry, there are also many challenges.

Mr. Truong Quy Hoang Phuong listed the difficulties including the number of new car manufacturers entering the electric vehicle’s production every day, especially firms in China; the model must match the taste, otherwise the risk of rejection is very high; the price must be lower and lower, the battery capacity is larger, the application of many new techniques, especially automation or self-driving, is essential to reaching overseas markets.

Having to overcome the aforementioned difficulties may hope to compete successfully,” BMW’s expert told VOA. (Translated)


Kasse animation 7.8.2023