Leasing a VinFast battery will require some math

Vietnamese automaker VinFast says it has a more affordable way to buy an electric vehicle. But the VinFast way also adds more math to the buying process for EVs, which can already be daunting for shoppers switching from gasoline-powered vehicles.

Beyond calculating state and federal tax breaks and variable electricity rates, VinFast requires buyers of its VF 8 and VF 9 crossovers to choose a battery leasing plan, since the pack is not included in the sticker price.

"It gets complicated on a vehicle that's already complicated," said Stephanie Brinley, principal analyst at IHS Markit. "But we are in a space where there is room to test different business models. If it doesn't work, they'll need to be flexible and try something else."

VinFast, which began taking orders in January before battery-lease pricing was available, used the New York auto show last week to further break down the numbers as it aims to deliver its first vehicles in the U.S. by the end of the year.

It also displayed the VF 7 crossover that could be sold later.

For drivers who don't rack up a lot of miles, VinFast is offering a flexible plan with a monthly battery subscription of $35 for the VF 8 and $44 for the VF 9. The price includes 310 miles of use. After that limit is reached, VinFast will charge 11 cents per extra mile for the VF 8 and 15 cents for the VF 9.

Brinley, who attended the New York show, noted that 310 miles a month is just 3,720 miles a year before the extra mileage costs kick in. That could be inadequate for most U.S. buyers.

For unlimited miles, a fixed lease plan will cost $110 a month for the VF 8 and $160 a month for the VF 9. To encourage orders this year, VinFast will freeze the monthly cost of the fixed plan over the vehicle's lifetime and the fixed price will transfer to a new owner, the automaker said.

VinFast said the leasing plan has important advantages over paying for the battery upfront.

"By separating the price of the battery from the acquisition value of the automobile, VinFast takes on all the risks related to the vehicle's battery and ensures a reasonable price for its products," the company said. "VinFast also commits to provide a lifetime battery warranty covering all maintenance and repair costs, and will replace the battery for free when charging capacity dips below 70 percent."

Although there is no mechanism to opt out of the battery lease at launch, the automaker said buyers will have the option of fully purchasing the battery as part of the vehicle starting in 2024. “From 2024, we will offer both options: leasing the battery or buying it with the car, with an expected proportion of 50-50 mix between both options,” the company said in a statement.

VinFast also announced new pricing for VF 8 and VF 9 variants, with two battery options.

For the VF 8, prices start at $40,700 for the base model with the smaller battery and run to $48,000 for the top trim with the larger battery.

Battery range runs from 248 miles to 292 miles based on the battery pack and trim, VinFast said.

Prices don't include shipping costs, which VinFast did not provide. The company is marketing the crossovers as premium vehicles and selling them directly to consumers.

For the VF 9, the pricing runs from $55,500 for the base to $61,000 for the top-trim model, VinFast said. Range runs from 262 miles to 369 miles, the automaker said.

All range figures are subject to change when the EPA certifies official numbers for the U.S. market. VinFast did not provide battery size specifications as measured in kilowatt-hours.

Industry analysts who visited the VinFast display at the New York auto show described the VF 8 and VF 9 prototypes as rough around the edges. The young automaker sold its first gasoline vehicle only in 2019 and its first EV last year in Vietnam.

But what VinFast may be lacking in polish in the prototype phase, it makes up for in enthusiasm, analysts said.

"There's clearly a lot of passion, excitement and motivation coming from VinFast to enter our market as soon as they can," said Robby DeGraff, industry analyst at AutoPacific, who attended the New York show.

"With three production-intent models on display in New York, they're taking this very seriously."

DeGraff said the battery-leasing program could "be a big 'nope' " for U.S. car shoppers. Although not a direct comparison, it would be like imposing a monthly charge for using the engine on an internal-combustion vehicle that's already been purchased, he said.

In New York last week, VinFast also announced a partnership with charging provider Electrify America.

The agreement includes two complimentary charging sessions across the Electrify America network and plug and charge compatibility. The feature, made popular by Tesla, allows vehicle owners to start charging by simply plugging in their EVs, followed by automatic payment after disconnecting.

"Delivering a convenient and seamless charging experience, Plug & Charge is an innovative technology that allows drivers of capable vehicles to pay for a charging session by simply plugging in their EV once billing information is set up on the VinFast app," the companies said in a joint statement.