Vietnam's VinFast wants to open U.S. showrooms in 2022 to take EV crossover preorders

As its name implies, VinFast Global, the new automotive aspirant from Vietnam, wants to go global fast. And to do that will mean breaking into the coveted and unforgiving U.S. market.

VinFast was founded only four years ago as the car, bus and scooter unit of Vingroup, the biggest private conglomerate in the up-and-coming Southeast Asian nation.

But already, the fledgling automaker — whose models sport a symbolic V-shaped grille — is planning to debut two all-electric crossovers at November's Los Angeles auto show. And springboarding off that, VinFast plans to open its first U.S. showrooms in 2022 and begin taking preorders from American customers in the first half of next year.

To lead this international expansion, VinFast just hired a German industry veteran as its new CEO. Former Opel boss Michael Lohscheller joined the company on Sept. 1 and pledges to fulfill VinFast's ambition of becoming a "global smart electric car company."

The strategy banks on leapfrogging old-guard rivals weighed down by such legacy costs as big payrolls, sprawling factory footprints and technology tilted toward internal combustion.

VinFast believes it has the advantage of being unencumbered.

"Since its inception, VinFast has been determined to become a global EV brand that strongly advances the global smart EV revolution," Lohscheller said in an email to Automotive News.

"This is quite an ambitious goal," he acknowledged. "But it is entirely reasonable because EVs are a new field. There are still many opportunities for new players with solid visions and potential like VinFast to break through and have a strong foothold in the global market."

The realities on the ground foreshadow an uphill battle. The company has only one factory, near Hanoi in northern Vietnam, and it sold only 30,000 vehicles in 2020 — all of them in its home market. Toyota sells that many RAV4 crossovers in the U.S. in a single month.

VinFast has an unproven track record in production, sales and customer service overseas and its name is virtually unknown in the U.S. At first blush, it looks like so many other hopeful EV entrants from China and beyond that aim high but have so far failed to crack Fortress America.

Chinese EV entrants Bordrin and Byton illustrate the difficulties ahead. Those Chinese startups had flashy concept cars, big ambitions and, in Byton's case at least, an infusion of foreign talent that included a former BMW Group vice president who led development of the BMW i8.

Bordrin ran out of money and folded, and Byton was thrown into limbo by the pandemic.

VinFast has not announced its pricing plans. But it expects to undercut the established competition by a wide margin while still offering the same bells and whistles with acceptable reliability.

Even if a newcomer manages to nail distribution, marketing and service, cultivating a good brand image remains a word-of-mouth game, said Karl Brauer, executive analyst at iSeeCars.com.

"It's a very tough journey to get U.S. consumers to accept a brand they are not familiar with," Brauer said. "You can't just throw money into changing people's minds. It takes time."

In a best-case scenario, he added, it may take a decade to really take root in the U.S.

But VinFast's secret weapon may just be its speed.

It built its factory in Hai Phong in only 12 months, and launched its first three models within 18 months of completing the plant. In the market segments in which it competes in Vietnam, it achieved No. 1 market share just 18 months after launching its first gasoline nameplate in 2019, the Fadil.

Now, VinFast is joining the industry's shift from internal combustion to electric by launching six EVs, starting with the VF e34 compact crossover. That product racked up 25,000 preorders in the first three months it was offered. Deliveries begin in December.

Next year, VinFast kicks off a Go Global expansion phase with the two new larger crossovers that will be on display at the Los Angeles show — the VF e35 and VF e36.

Three more smaller EVs are planned from 2023 and beyond.

VinFast has all the markings of a modern high-tech automotive disruptor. It is promising the latest automated driving abilities and talking about artificial intelligence, augmented reality and solid-state batteries. And Vingroup has two female vice chairwomen overseeing the automaker.

When VinFast begins taking U.S. orders for the VF e35 and VF e36 in the first half of 2022, the company intends to bypass franchised dealers and retail through a purely digital format.

"We will not establish dealer systems, but we will have showrooms and self-deploy the distribution and sales activities to ensure high-standard services for customers," Lohscheller said.

"This represents our primary positioning in the near future. However, further in the future, we will welcome opportunities to cooperate with leading distribution agents in the global markets."

The VF e35 and VF e36 will have 300-kw motor systems, powered by an 86 kilowatt-hour battery in the e35 and 96 kilowatt-hour battery in the e36. Driving range is up to 310 miles for the e35 and 340 miles for the e36.

The figures are based on the European standard — the Worldwide Harmonized Light Vehicles Test Procedure, which is considered more optimistic than the U.S. standard set by the EPA.

As part of its strategy, it will rely on a battery rental program and a 10-year warranty that will bring "assurance and convenience to customers."

The upcoming vehicles will also have a suite of autonomous driving technologies, including lane-keep assist and collision warning as well as automated parking and summon-vehicle functions.

VinFast says its new vehicles will debut with "Level 2.5" autonomous features but be Level 3 "compatible."

Level 3 means the vehicle is capable of making driving decisions, allowing drivers to take their hands off the wheel and their eyes off the road.

Inside, both electric crossovers sport a slimmed down, minimalistic dashboard dominated by a massive touchscreen, mimicking the futuristic layout pioneered by Tesla. There is no instrument cluster or meter display behind the steering wheel.

Storied Italian styling studio Pininfarina lent its hand to the sophisticated, understated exteriors.

After the L.A. show, VinFast will take its technology to CES in Las Vegas, where it plans to introduce its electric lineup at another Tesla-inspired event, a VinFast Global EV Day.

Tapping into America is not VinFast's only goal. In July, it opened offices in Canada, France, Germany and the Netherlands. It plans to launch sales in those markets next year, too.

VinFast says its Hai Phong plant is ready to supply them.

The highly automated factory has 1,200 robots and capacity to build 250,000 vehicles a year. It can also make 500,000 electric motorcycles a year.

The assembly plant occupies about half of a 1,700-acre plot that VinFast hopes will accommodate expansion as sales grow. "But in the future," Lohscheller said, "VinFast may consider organizing production in the host countries depending on the actual needs."

An integrated supplier park seamlessly feeds the assembly line.

On-site operators include LG Chem for batteries, ZF for suspension and gearboxes, Faurecia for interior and exterior assembly, Lear for seating and Namyang Nexmo for steering.

VinFast counts South Korea's Samsung SDI among its other battery partners. And in August, it agreed with Chinese battery maker Gotion High-Tech Co. to discuss buying lithium iron phosphate batteries and possibly building a plant in Vietnam to produce them. This chemistry, known as LFP, doesn't use cobalt or magnesium and is seen as a low-cost alternative for future EVs. The iron phosphate chemistry is another new approach being pursued by Tesla.

VinFast says it has an R&D engineering staff of 1,900 when leveraging the artificial intelligence and big data engineers across Vingroup.

To help fund the expansion, VinFast said in April it was considering an initial public offering. That announcement came in response to market rumors that it might be planning a U.S. listing.

"I have always been attracted by new challenges," Lohscheller, a veteran of Mitsubishi, Volkswagen and Opel, said in the statement that announced his appointment. "When the opportunity came to join VinFast, I was immediately attracted because of the growth opportunities."