VinFast zooms past Chinese contenders in Vietnam’s EV race

Sign up for the Daily Newsletter, sent exclusively to our premium subscribers. We break down the big and messy topics of Asia’s tech and startup community. Get the newsletter in your inbox everyday with a premium subscription.

Hello reader,

There’s not a day that goes by when I don’t see an electric vehicle on the streets of Hanoi.

That’s a far cry from just a few years ago, when such a sight would be a rarity. Now, I spend at least a few minutes every day stuck behind a VinFast EV – normally a GSM taxi – while navigating city traffic.

Does my anecdote prove the homegrown firm has secured its spot as the leader of Vietnam’s EV market from now until the end of time? Chinese manufacturers certainly don’t think so: While knocking VinFast off its perch will be a challenge, they’re giving it a go.

Today we look at:

• The EV race in Vietnam heats up
• Global travel-booking platform RateHawk opens a Singapore office
• Other newsy highlights such as biotech startup ArrowBiome raising US$1 million in seed funding and Oyo’s plan to raise funds at a slashed valuation.

Premium summary

Start your engines

Image credit: Timmy Loen

The race is on to secure a piece of the growing EV market in Vietnam. And while local player VinFast has a clear advantage, Chinese EV makers are attempting to make inroads.

Companies like BYD and Wuling have big ambitions in the country, having already established themselves as market leaders in other parts of Southeast Asia.

• Race to the bottom: To compete on cost, VinFast recently launched VF 3, an affordable option with a non-battery version priced at US$9,200. The company got nearly 28,000 preorders for the new model during a three-day event last May. VinFast called this a “record-breaking” achievement for the local auto industry, though over a fifth of the orders came from the firm’s employees and its related companies. Not to be outdone, Wuling recently cut the price of its cheapest Mini EV by 19% to US$7,600, with a battery included.
• Uphill climb: Despite finding success in other markets, replicating that in Vietnam may be difficult not just for Wuling, but also for other Chinese brands. Vietnamese consumers have a “low perception of Chinese cars” and generally prefer Japanese brands when it comes to imported autos, said Lu Yao, a sector adviser at Allianz Trade. Wuling’s Mini EV is one of the world’s best-selling electric cars, but it sold less than 600 units in Vietnam last year, well below its target of 5,525.
• Eyes on the prize: VinFast has regional ambitions of its own, with initial plans to ramp up its presence in Indonesia and Thailand. This puts the Vietnamese firm on course to compete with Chinese brands like BYD, Great Wall Motor, Hozon Auto, and Chery, which have already secured a foothold across Southeast Asia. VinFast will likely find this to be tough sledding in markets where affordability is key, as the Chinese brands’ experience has allowed them to achieve economies of scale and significant cost advantages while maintaining high quality, according to Lu.

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

News spotlight

RateHawk touches down in the Lion City

Want to build a startup that doesn’t just survive, but thrives?

Quick bytes