The jubilant mood in the fledgling Vietnamese auto industry was evident in early July 2022. Almost 1700 cars were arranged in the shape of a map of Vietnam in the northern city of Hải Phòng, according to government-owned local media company Vov World, setting a new world record for the largest automobile arrangement ever created.

The grand spectacle was organised by none other than VinFast, a local automotive start-up that has made international headlines for its ambitious electric vehicle (EV) plans. Since being founded in June 2017 by Vietnam’s richest man Phạm Nhật Vượng, VinFast has blazed a trail within the south-east Asian country’s nascent auto industry.


The company revealed its first two gasoline-powered vehicles at the Paris Motor Show back in 2018, which were developed after partnerships with BMW, Italian design house Pininfarina and German suppliers Bosch and Siemens. 

Fast-forward to today and VinFast aims to go fully electric by the end of 2022. It expects to break ground on its first US manufacturing facility in North Carolina in September 2022, where it will invest $2bn in the first phase of the factory, due to open in July 2024. It is on the lookout for a location to establish another EV plant in Europe. 

This international push forms part of VinFast’s bold objective of delivering EVs to consumers in the US and Europe by the end of 2022. Even as it gains a foothold in Vietnam and helps to develop the country’s automotive supply chains, the EV maker is set to face intense competition in global markets.

Transformational factory

VinFast is the car-making arm of Vingroup, the largest private conglomerate in Vietnam, with interests in everything from hotels, hospitals and apartments to education and agriculture. The conglomerate is hugely influential in the south-east Asian country, with its 2021 revenues of almost $5.5bn equivalent to roughly 1.5% of Vietnam’s gross domestic product.

In the short time since being established, Vingroup’s automotive subsidiary has made significant strides. VinFast has transformed an 877-acre plot of uninhabited swampland outside the city of Hải Phòng, on Vietnam’s northern Red River Delta, into a modern automotive manufacturing complex.


The factory became operational in June 2019, just 21 months after the project broke ground. It is fitted with the latest automation equipment, supplied by Siemens, and has a production capacity of 250,000 vehicles. 

Le Thi Thu Thuy, vice chairwoman of Vingroup and global CEO of VinFast, says that the auto industry was almost non-existent in Vietnam prior to the founding of VinFast.

“One of the biggest challenges for us was the supply chain, because it didn’t really exist in Vietnam,” she tells fDi, adding that VinFast is aiming to become vertically integrated at its Hải Phòng factory by producing in-house various components like the electronics, car body and plastic parts.

Supply chain development

In the past, auto manufacturing in Vietnam almost exclusively involved ‘completely knocked down’ kits, where parts are imported from overseas and then assembled locally. 

While Vietnam’s automotive supply chains are still at “a very early stage”, VinFast has helped their development and brought more quality cars to the market, according to Trinh Hoang Minh, research associate director at Dragon Capital, a Vietnam-focused financial institution.

Ms Thuy, who also serves as the vice chairwoman of Vingroup, says global disruptions over the past two years — which includes the chip shortage, Covid-19 outbreaks and shipping blockages — have made it “important that [VinFast] has control over [its] supply chain”. 

“We have managed to convince a lot of tier-one suppliers to move to Vietnam, either to be with us in our supplier park, next door to our factory, or even to be somewhere in Vietnam to supply to us,” she says.

Plenty of partnerships

In early July, the automaker announced it will invest tens of millions of dollars into Taiwan-based Prologium, which will supply solid-state batteries for VinFast starting in 2024. Elsewhere, Vingroup has signed a variety of deals, including one with US chipmaker Intel in May 2022 to develop a wide range of advanced computing systems.

VinFast plans to open its own EV battery plant at the Vung Ang Economic Zone in the central province of Hà Tĩnh as soon as 2022. At the ground-breaking ceremony in December 2021, Vietnamese president Nguyễn Xuân Phúc hailed the contribution the facility will make to the development of a “modern and sustainable” economy.

“Vingroup’s switch in its strategy has shown its strong and direct involvement in Vietnam’s economic restructuring and modernisation to enter a new growth path with higher productivity, more advanced technology and more added values,” he said.

Ms Thuy says that VinFast has increased the local contents of their EVs from less than 30% to more than 60%, excluding the batteries.

“A significant part of the vehicle is being made in Vietnam,” she says. “We expect that with time, the supply chain will further strengthen and we will be able to get more partners to come join us in Vietnam.”

Mr Minh says that VinFast has “unique advantages” over other automakers in Vietnam. This is due to the ability of its parent Vingroup to build nationwide charging infrastructure and lobby the government for favourable tax incentives for EVs in Vietnam.

“Vietnam will attract more automotive suppliers once Vinfast can prove its success and reach a large manufacturing scale,” he says, noting that this is between 200,000 and 300,000 vehicles per year.

US growth plans

VinFast has entered the US market with a unique proposition. The price of their two electric sports utility models — the five-passenger VF8 and seven-passenger VF9 — does not include the battery, which is the most expensive EV component.

Instead, consumers will have the option to lease the batteries from VinFast for a small monthly fee. Once the charging capacity of the battery dips below 70%, the automaker said it will replace it for free.

Even with this innovative business model, Mr Minh says that VinFast “will need to invest heavily in its brand network overseas” for it to be successful. The company has already opened six showrooms in California to market its new vehicles, with plans to open more than 30 across the state by the end of 2022.

Ms Thuy says VinFast has been “very intensely” monitoring legislation and efforts to develop the EV supply chain in the US. She adds that the federal government’s efforts to build the “whole industry” would be “very good” for VinFast as well.

In July 2022, VinFast announced that it had received a $1.2bn incentive package from the state of North Carolina for its planned EV manufacturing hub. Across 2000 acres, the site will include electric car and bus production and assembly, and space for suppliers. The company estimated the first phase will require an investment of $2bn.

Ms Thuy says the large site gives VinFast enough space to expand, and praised the state of North Carolina for its support and intention to invest further in green energy.

“They are [also] going to invest in building a chassis network in North Carolina and the whole government has been very supportive to us so far,” she says.

The first phase of construction of the project is expected to begin in September 2022, says Ms Thuy, with production commencing from July 2024. The EV maker has its sights set on European markets too. In June, VinFast announced plans to open more than 50 stores in Germany, France and the Netherlands.

The quotes used in this article were taken from a video interview with VinFast’s CEO Le Thu Thu Thu.

This article first appeared in the August/September 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.