Despite the cancellation of auto shows scheduled for this winter due to Omicron, the year is off to a flying start for electric car makers. Especially for the Vietnamese brand VinFast, which takes advantage of the Consumer Electronics Show (CES) in Las Vegas to formalize its intention to establish itself in the North American portrait of the automobile… including in Quebec.
Along with Vancouver and Toronto, Montreal will be one of the first three cities to host one of the 38 points of sale that VinFast intends to open across the country by the end of 2023. No surprise there: Quebec and British Columbia are leading the charge. electrification in the Canadian automotive sector, while Ontario remains the largest consumer of passenger vehicles, all engines combined.
What surprises is the origin of this brand. It was created not quite five years ago by industrial giant Vingroup JSC. Asian companies with more familiar names, such as Hyundai or Mitsubishi, illustrate what the Hanoi, Vietnam-based group looks like. Its activities range from the construction and management of commercial and residential buildings to the creation of systems for the analysis and interpretation of computer big data.
The company is worth some C $ 20 billion on the Ho Chi Minh City Stock Exchange.
Five vehicles in 2022
VinFast will be added to the short list of new vehicle brands sold in Quebec in the coming months. Last fall, Chinese electric vehicle brand Imperium Motors introduced new products for the Canadian market, but their sales have yet to begin. “We are quite happy to see this interest in the Canadian market from the newcomers,” said Simon-Pierre Rioux, general manager of the Association of Electric Vehicles of Quebec (AVEQ). Mr. Rioux says he has a little more confidence in the chances of success of VinFast, which is supported by an already well-established parent company in Asia.
VinFast’s primary goal is to sell 45,000 vehicles globally by the end of 2022, primarily in North America. Its approach to achieving this is similar to the one that has allowed Tesla to establish itself in the global auto industry in recent years: direct sales without local traders to sell its merchandise.
Interesting fact: Hans Ulsrud, who was appointed as director of growth for VinFast in Canada last year, was in 2009 the first employee Tesla hired in the country. Its role is to convince Canadian motorists this year to buy a full-size VF 8 SUV or a sort of van called VF 9. Their advertised maximum range is 510 and 684 kilometers per charge. Three more electric SUVs revealed at CES on January 5 will be added to the catalog by the end of 2023.
Pricing has yet to be established, but VinFast has mainstream vehicles like Ford’s Mustang Mach E in its sights. Hans Ulsrud indicates that his first two models sold with us would have to comply with government requirements so that buyers can benefit from the purchase assistance, which, in Quebec, is equivalent to $ 13,000 in all, after taxes. VinFast adds two other arguments to attract buyers: a 10-year warranty on its batteries and the possibility of buying a vehicle at a lower cost and then renting the battery, for a monthly payment of around $ 50, on condition of respecting a certain mileage limit.
“Our desire is to offer vehicles that are durable and equipped with the latest technologies, at a price that makes them more accessible,” assures Sang Hong Bae, director of technology for VinFast. This is also why the base versions of its electric vehicles will be powered by lithium-iron-phosphate (LFP) batteries, which are safer and less expensive to produce than the nickel-cobalt-aluminum batteries used in its vehicles above. range. This same approach was adopted by Tesla last fall to reduce its own manufacturing costs.
The cost of batteries remains the sinews of war in the electrification of transport. Several manufacturers promise that, by the end of the decade, this cost will drop enough for electric vehicles to retail for the same price as comparable gasoline vehicles, without purchase assistance.
The idea of renting the battery to reduce the purchase price of vehicles more quickly is akin to a false good idea, believes Simon-Pierre Rioux. “Renault tried it a few years ago and customers didn’t like it,” he recalls. He adds that the ten-year warranty offered by VinFast should reassure buyers about the reliability of the vehicles.
New battery technology
Ultimately, VinFast hopes to be among the first groups to capitalize on new solid-state battery technology, promised to be both more efficient and less expensive. Last fall, the company presented a $ 500 million investment plan to develop such batteries, a technology explored by most manufacturers but not expected to hit the market until 2028 at most. early.
To accelerate its development, VinFast says it is open to establishing itself in North America and does not hide its interest in sourcing locally either. “It makes a lot of sense to produce our vehicles where we will sell them, so if we find suppliers nearby it will be even better,” says Hong Bae.
It remains for VinFast to imitate its predecessors and sell its first vehicles in Quebec …