China EV makers struggle to break VinFast’s hold in Vietnam

With Vietnam’s passenger electric vehicle sales more than doubling in 2023 compared to the previous year, competition is fierce.

Homegrown hero VinFast, which commands the lion’s share of the domestic market, is being challenged by Chinese EV makers looking to replicate their success in other parts of the region.

Photo credit: PhatTai / Shutterstock

To defend its turf, VinFast launched an affordable mass-market model, the VF 3, at 235 million dong (US$9,200) for the non-battery version, priced at four to five times the cost of the country’s ubiquitous motorcycles. Customers choosing to purchase the car without a battery can opt for a flexible battery subscription plan, which offers three tiers of recurring monthly costs tailored to driving needs.

In the first 66 hours of the VF 3’s three-day preorder event in mid-May, VinFast secured nearly 28,000 preorders. The company hailed this as a “record-breaking” achievement in Vietnam’s automotive industry and a testament to the “very high market demand.”

That said, the carmaker told The Business Times that over a fifth of the preorders came from VinFast employees and its related companies.

The EV firm aims to deliver at least 20,000 units of the VF 3 in 2024, aspiring to make it Vietnam’s “national car” in a country where less than 6% of the population owns a car.

This ambition, however, is being challenged by Chinese EV carmakers, who are ready to compete head-on in a race to the bottom on pricing.

The VF 3 goes head-to-head with the Wuling Hongguang Mini EV, a Chinese car assembled in Vietnam and launched in June 2023 at a similar price of 239 million dong (US$9,400).

While VinFast was still tallying preorders for the VF 3, Wuling cut the price of its cheapest Mini EV by 19% to 194 million dong (US$7,600), making it about one-third cheaper than a VF 3 unit with a battery included.

Photo credit: VinFast

Both the VF 3 and the Wuling Hongguang Mini EV, the smallest and most affordable electric cars on the market, are four-seaters designed for short-distance daily commutes in urban areas.

However, despite being one of the world’s bestselling EV models, Wuling’s Mini EV sold less than 600 units in Vietnam last year, significantly missing its target of 5,525 units.

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