On northern Vietnam’s Red River Delta, the world’s most ambitious electric-vehicle (EV) upstart occupies a factory complex fringed with mango trees and palms. Outside VinFast’s plant by the port city of Haiphong, fishermen in conical hats still plumb mudflats for grass carp and tilapia; inside, each car negotiates an overhead ergonomic conveyor assembly line measuring 2.5 miles. One hundred and twenty-five robot arms spin like a pneumatic ballet dancer, adding 3,000 components to the mix, while igniting spark after spark with rivet after rivet.
All machinery is imported from Germany, Japan and Sweden. The 98% automation of welding is a major advantage. There are 250,000 cars per year. The facility is able to simultaneously build multiple vehicles on one line, rather than having individual lines for every vehicle. Even more impressively, Google Maps shows half of the 877-acre site sits beneath the South China Sea—a quirk because it was reclaimed from the waves and made operational in just 21 months.
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VinFast CEO Le Thuy likes to joke that not even the Mountain View, Calif., behemoth can keep up with the EV maker’s lightning pace. “At the start, everybody said that building cars in two years was impossible. Some even called us crazy,” she says. “But we launched three car models in those 21 months.”
In 2021, the global electric vehicle market had a value of $185 billion. It is projected to increase by 24.5% per year and reach $980 billion in 2028. VinFast wants a share of the pie, and it is aggressively targeting U.S. as well European markets. It must either displace Tesla, or convince gasoline-car owners to change to electric vehicles. That’s no small feat: China accounts for about half of the global market for EVs, yet still none of its firms have tried the U.S. despite plowing tens of millions of dollars into feasibility studies.
VinFast CEO Le Thuy is at Vinpearl Nha Trang
Linh Pham for TIME
When it comes to the crowded global EV market, skepticism is normal. Every startup is quick to catch up with its competitors, and then another funding round comes along. Today, the U.S. industry has consolidated behind Tesla—worth some $750 billion and turning its co-founder, Elon Musk, into the world’s richest man—and legacy automakers are belatedly turning to a market whose importance is soaring alongside global oil prices. What does it mean for a parvenu coming from Vietnam’s technological backwaters to expect to succeed?
It’s a huge challenge. But VinFast’s parent VinGroup is no ordinary firm. Controlled by Vietnam’s richest man, Pham Nhat Vuong, VinGroup is the country’s largest conglomerate, with a total market value of $24.4 billion. Its 2020 revenues accounted to 2.2% of the country’s GDP. The reach and impact it has is incredible. “It’s a remarkable story,” says Huong Le Thu, principal fellow at the Perth U.S. Asia Centre and adjunct fellow at the Center for Strategic and International Studies. “There has never been anything of this size in Vietnam. It’s overwhelming at one level because now you can do everything with VinGroup.”
It’s almost a state within a state, at least for the upscale. A well-to-do Vietnamese can be born in a VinMec hospital, study at a VinSchool, live in a VinHome, shop at a VinCom mall, graduate from VinUni, vacation at VinPearl resorts, and, perhaps, become one of the leviathan’s 40,000 employees.
And now, they can commute in a VinFast electric car, EVs having emerged as the vehicle for the firm’s ambitions to leap from domestic to international. VinFast acquired a GM factory in Hanoi, Vietnam, and started producing gasoline VinFast vehicles a little over a year later, using intellectual property licensed from GM and auto giants BMW. These initial offerings were essentially ciphers of Western brands—specifically a Chevrolet Spark compact and a BMW 5 Series sedan and X5 SUV. Because of clever marketing and low costs, they proved immensely popular, capturing 17% to 19% of each market segment’s share domestically. These were essential steps in the learning process.
VinFast is going to be exclusively producing EVs from August. It is also planning to establish a North Carolina plant worth $4 billion, and it is looking for European plants. Chatham County’s 2,000-acre plant will produce 150,000 electric cars annually starting in July 2024. This would create 7,500 new jobs. It’s the largest single foreign direct investment in the state’s history and indicative of the scale of VinFast’s ambition, which is “to become one of the top global EV makers in five to 10 years,” says Thuy, also a deputy chairperson of VinGroup. “We think that we can be as good as anybody in the world.” On July 14, VinFast opened its first six overseas showrooms in California, including a flagship store in Santa Monica. The VF7, and VF8 are the two first models that VinFast has made available for American customers. “It’s a solid car, no rattles or anything that would indicate a problem,” says Michael Dunne, founder of the ZoZoGo EV market intelligence firm, after a test drive. “But the U.S. market is not for the fainthearted.”
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VinFast wants to entice American EV shoppers with a unique proposition: a 10-year warranty and a sticker price that doesn’t include the cost of the battery—an EV’s most expensive component. The company will offer the possibility to lease the batteries for a monthly fee. Vin-Fast offers a free swap service for batteries that have a life expectancy below 70%. “Investors really like this kind of business-model story,” says Yale Zhang, an auto-industry analyst based in Shanghai. “The question is you need to source more batteries to make it work.”
It’s a bold play in an extremely competitive field. But despite VinFast’s inexperience and lack of core technologies, it has much deeper pockets than many new entrants into the EV market. VinGroup has already invested $6.6 million in VinFast, as well as assembled a top-notch leadership team from firms such Ford, Renault, GM and BMW. The styling is by Italy’s Pininfarina; the dashboard displays by LG; the batteries by Samsung. “We leased IP from BMW, and so that immediately became the standard we worked to,” says Shaun Calvert, VinFast deputy CEO in charge of manufacturing, formerly with GM.
There are also some very influential leaders at the firm. In late March, President Joe Biden tweeted that VinFast’s U.S. investment plans were “the latest example of my economic strategy at work.” Within days, VinFast says, it had almost 10,000 preorders from customers in the U.S. “We keep joking that President Biden is the best salesman that we’ve ever had, and we didn’t have to pay,” says Thuy. It doesn’t stop there. Thuy enjoyed a 5-minute speech from Gina Raimondo, U.S. Commerce Secretary, at the SelectUSA conference in June. She was delighted to dedicate most of her five-minute talk to VinFast. “I’m amazed by the level of support that we’ve received from the U.S. government,” Thuy adds.
In the Haiphong VinFast plant’s body shop, assembly robots assemble car bodies.
Linh Pham for TIME
VinFast’s American adventureThis aligns well with Hanoi’s economic and geostrategic goals, which seek to make Vietnam an economy of high income by 2045 and an economy of upper-middle income by 2030. Already, the majority of Samsung Galaxy smartphone sold in America are made here. Hanoi politicians prefer to work with local people rather than looking abroad. “They want companies like VinGroup to take the lead in the national economy,” says Le Hong Hiep, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.
At the center of this ambition sits Vuong, the oldest of three children who grew up poor in Hanoi with his mother running a tea stand and his father serving in the Vietnamese army’s air-defense division. He was gifted in mathematics and received a scholarship from Moscow Geology University. He moved to Kharkiv after the Soviet Union collapsed, and opened a Vietnamese restaurant. Soon he began to specialize in instant noodles with flavor blends of his native Ukraine. He eventually exported from Ukraine into 29 other countries. His fortune was swiftly followed. Mivina is still synonymous with Ukrainian noodles. In 2010, Vuong sold his company to Nestlé for a reported $150 million, returning to Vietnam ready for a fresh challenge.
VinPearl was the first of his domestic projects. It is located on Hon Tre Island, Nha Trang. Then came a flurry in luxurious real estate developments, such as Ocean Park which was 45,000 apartments and villas around an artificial sand-and seawater beach, located in central Hanoi. VinGroup today boasts 27 shopping centers and 83 urban areas in Vietnam. Vuong earned a reputation for his bold business moves and ability to pivot quickly. VinGroup decided not to venture into airline business in January 2020, as the pandemic was raging. Vuong instead repurposed a factory for low-cost ventilators.
VinFast’s overseas expansion also provides protection for Vuong, whose elitist, capitalist Vin empire chafes with some of the ruling Communist Party’s old guard. In 2019, Vuong’s younger brother was sentenced to three years for bribery, and a purge of wealthy tycoons has gathered pace since, mirroring a similar campaign in China. “If he is successful overseas, and especially in the U.S., that will strengthen Vuong’s bargaining power in Vietnam and enhance his political status,” says Hiep.
Vuong is well-known for her refusal to be seen and high standards. She is also an advocate of women in a region that is plagued by sexism in all aspects, including business. Four of VinGroup’s six vice chairpersons are women, including Thuy, who joined VinGroup from the now defunct Lehman Brothers investment bank, where she was vice president covering Asian markets. Asked about Vuong’s leadership style, Thuy replies, “Vision, strategy, discipline, and a lot of humanity … We only do things that have a big social impact.” For Huong, he’s “one of those visionary entrepreneurs. Maybe you could compare him to a Vietnamese Elon Musk.”
VinFastEVVF8 new cars can be tested driven by chosen guests on Vinpearl Nha Trang a leisure island of VinGroup in Nha Trang.
Linh Pham for TIME
It’s an obvious comparison given Vuong’s increasingly laser-like focus on EVs. VinGroup’s VinMart Convenience Store chain was sold by VinGroup in December 2019. Last May, VinGroup announced the shuttering of its consumer-electronic arm, VinSmart, despite having secured 17% of the domestic smartphone market by then and marketing four models in the U.S. through AT&T. Instead, the conglomerate said it wanted to “mobilize all resources” into VinFast.
As the pandemic rumbled on, with borders closed and even domestic tourism curtailed, the group’s VinPearl resort on Hon Tre Island became an engineering hub. From May 2021 through October 2021, more than a thousand VinFast employees and their families stayed on the island to continue working uninterrupted 24 hours a day. “At least we had the golf course to occasionally play on!” says Hoang Vu Nguyen, VinFast chief deputy of power train and a Ford veteran. It was here the differences of VinGroup’s working style became apparent. Rather than waiting for layers of local, regional, and international management to greenlight decisions, “as a chief deputy, I have direct communication with our CEO. The approval layer is almost flat.”
Of course it is. symbolic that Vuong’s first venture since returning from Ukraine became the hub for his new foray overseas. Given Vuong’s ties with both Russia and Ukraine, his perspective on Vladimir Putin’s Feb. 24 full-scale invasion has been subject to much conjecture. Vuong, who declined an interview request, has not commented publicly on the war in Ukraine, though a close confidant says he is “heartbroken.” Retaining deep ties with both nations, Vin-Group has helped arrange visas for Russians who have faced European travel restrictions.
Vuong’s discretion mirrors that of Vietnam’s government, which has long rooted its security in maintaining relations with all great powers, and is especially wary of enraging the Asian superpower to its north. For Vietnam’s leaders, Putin’s invasion of Ukraine was seen as “validation of their approach to China,” says Alexander Vuving, a professor at the Asia Pacific Center for Security Studies in Hawaii. For Hanoi, the lesson of Kyiv’s flirtation with the West was that it jeopardized the nation’s sovereignty and security. “They know their position next to China is very similar.”
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Despite this, neutrality was shaken by the invasion. Vietnam still purchases around 80% of military hardware from Russia, and it abstained on the U.N. motion to condemn Russia’s invasion. Yet it is an uncomfortable position for Vietnam’s leaders, and investments like VinFast’s North Carolina factory that build goodwill in the U.S. Congress offer a welcome counterweight.
VinFast’s U.S. investment “serves the geopolitical objectives of Vietnam, which is to cooperate with the U.S., boost ties, and balance trade,” says Vuving. One, a VinFast IPO in the United States is only possible with the express approval of Vietnam’s Communist Party. “The Vietnamese government has been super supportive,” says Calvert.
VinFastEVVF8 Car Interior Details on Display for Select Guests in Vinpearl Nha Trang, July 8.
Linh Pham for TIME
U.S. policy is supported also by geopolitics. As Washington’s relations with Beijing enter a deep freeze, the White House is keen to cement ties across the Asia-Pacific—even though, politically at least, China and Vietnam are very similar beasts: regimes ruled by communist parties with scant respect for rule of law or human rights. Vietnam currently holds at least 208 political prisoners, according to the 88 Project, a rights watchdog that has documented “a concerted crackdown on dissent that has worsened in recent years.”
A key difference, of course, is that China’s ambitions on the global stage present a direct challenge to U.S. hegemony. President Xi Jinping’s avowed desire to reclaim “center stage in the world” undermines American interests from Europe to the Pacific, Latin America to Africa, most egregiously spotlighted by his backing of Putin’s invasion. To better confront China economically, diplomatically, and technologically the House of Representatives approved the America COMPETES Act on Feb. 4. “If you’re Xi Jinping, you have to make the world safe for autocrats,” one top State Department official tells TIME.
Vietnam does not harbor any geostrategic ambitions. It is focused on its neighbors, primarily Cambodia and Laos. “China is competing strategically with the United States; Vietnam is cooperating strategically with the United States,” says Vuving. Vietnam also frequently clashes with Beijing over disputed islands in the resource-rich South China Sea, and memories of China’s ill-fated invasion of 1979 burn brighter than those of American misadventure in the region. The U.S. is favored by 84% of Vietnamese today.
This is the comfort that comes from knowing where it fits in the global order. While China’s leaders leverage the “century of humiliation” wrought by colonial powers to justify a resurgent and toxic nationalism, Vietnam has no such baggage; over the past century, this plucky nation has bested French, American, and Chinese invaders. Vietnam knows who it is. He is the toughest and most scrappy little boy in an otherwise rough area. Can Vietnam’s premier company be competitive with Tesla? It might not, given the size of the nascent EV industry. “The real competition of EVs like VinFast are not Tesla,” says Stephanie Brinley, principal analyst at S&P Global Mobility. “The real competition is internal combustion engine owners, getting those guys to jump on board.”
VinFast Vietnam and Vietnam believe they can. On a cruise for VinFast investors tracing the jagged limestone karsts of northern Vietnam’s Ha Long Bay, a musician in silk ao dai strums a whining version of the Eagles’ “Hotel California” on the single-stringed zither, as a DJ cranks up a thumping bass track. It’s a scene that telegraphs where this Southeast Asian nation now wants to be: a business-friendly, tech-savvy industrial powerhouse. The next South Korea, if you will, an ambition that feels explicit, given the DJ’s K-pop-inspired peroxide mop. “A lot of people in Vietnam take pride in VinFast, and they want to support the project, and they want us to be successful,” says Thuy. To electrify America’s “dark desert highway” with Vietnam’s red star.
VinFast cars were seen operating at Vinhomes Riverside (a VinGroup residence complex) on July 7.
Linh Pham for TIME
—With reporting by Eloise Barry/London
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