Vietnam’s VinFast to deliver EVs to Europe this year as EU probes China rivals

Vietnamese electric vehicles maker VinFast plans to ship its first EVs to Europe this year after receiving regulatory approval, its chief executive told Reuters on Thursday, as the European Union considers imposing tariffs on its Chinese rivals.

Under the plan, about 3,000 of its VF8 crossovers would be delivered to France, Germany and the Netherlands in the fourth quarter of this year from VinFast’s factory in northern Vietnam, a person familiar with the plan told Reuters. The source declined to be named because these details were not yet public.

The Nasdaq-listed company’s plan to expand into Europe would represent a four-fold increase from a previous unmet target of delivering 700 cars by last July, and comes as the EU probe into Chinese EV makers creates a possible gap in the market.

If fulfilled, Europe would become VinFast’s biggest overseas market this year. The company had shipped about 2,100 EVs earlier this year to the United States.

“We expect to deliver the first VF8 models to French, German and Dutch customers in the fourth quarter of this year,” Le Thi Thu Thuy, VinFast’s chief executive, said, adding the company’s other models VF6, VF7, and VF9 would be launched in the European market next year.

Thuy did not indicate the number of VF8 sport utility vehicles (SUVs), but the person familiar with the matter said it would be around 3,000 vehicles, including some for Israel.

The loss-making company repeatedly revises its targets.

The VF8 SUV has already been approved by a European regulator as compliant with EU standards, and can be sold within the 27-country bloc, Thuy said.

The company is also completing the procedures to obtain the voluntary Euro NCAP safety rating, she added.

CHINESE COMPETITION

Europe is one of the biggest markets for Chinese automakers, who shipped almost 70,000 EVs in the first seven months of this year, nearly triple the same year-ago period, according to consultancy Inovev.

Should the EU probe conclude that punitive duties on China-made EVs are warranted, VinFast could find its cars are more competitively priced.

Its VF8 model starts at 50,990 euro ($54,217.67) in France. China-made Tesla Y model, which is also threatened with EU tariffs, starts from 46,000 euro.

VinFast’s expansion into Europe is part of a global plan that includes building new factories in the United States and in Indonesia and targeting also India, the Middle East, Africa and Latin America.

Just before its Nasdaq debut in August, the company stepped up deliveries of cars in the second quarter, with a total number of 11,315 EVs made available to clients by the end of June, largely to the domestic market thanks to a scheme to turn its cars into green taxis in Vietnam’s main cities.

VinFast’s first-quarter revenue dropped 49% from the previous year, and it posted a net loss of $598 million. It expects to announce second-quarter results later on Thursday.

VinFast, which is part of Vietnamese conglomerate Vingroup , was formed in 2017 and began making EVs in 2021 after dropping its manufacturing of cars with internal combustion engines.

By Phuong Nguyen & Francesco Guarascio – Reuters – September 21, 2023