In a major technological shift, VinFast, an auto manufacturer, located in Haiphong, has recently loaded up a cargo carrier with state-of-the-art electric VF8 SUVs bound for the promising California market. This marks the first shipment abroad after more than 65,000 orders of VF8 and VF9 models. Entrepreneur Pham Nhat Vuong, widely regarded as the richest person in Vietnam and whose Vingroup is the country’s largest private enterprise, is behind VinFast. He got his start in business in 1993 selling noodles in Ukraine and is now investing US$5 billion in EVs. His conglomerate has a market value over US$24.4 billion. During the pandemic, the company’s revenue alone accounted for 2.2 percent of the national GDP.
In May 2021, Vingroup decided to shut down its VinSmart electronic devices manufacturing unit to “mobilize all resources” on developing its car-making business. VinFast, which was founded in 2017 and began operations two years later, announced on December 6 that it would convert to a Singapore public limited company to list on the Nasdaq in New York. The company’s arrival on the global scene has signaled a new era for Vietnam and sounds a clarion call for increased investments in high-tech manufacturing in the country.
A study by the Center for Strategic and International Studies (CSIS) in Washington identified Vietnam as an emerging digital powerhouse in Southeast Asia. Hanoi is aiming to position the country as a regional hub for the manufacturing of semiconductors and other technology. Tech giants such as Apple, Samsung, LG and Foxconn, among others, have already established a presence in the country. US-based Universal Alloy Corporation (UAC), which manufactures electronic devices and components for airplanes built by Boeing and Airbus, has invested US$170 million in the Danang Hi-Tech Park. Meanwhile, a few months ago, Google announced that it was moving production of its Pixel phone from China to Vietnam.
Vietnam is following Japan and South Korea in bringing its technology to the US and setting up manufacturing operations there. VinFast has pledged to invest over US$4 billion to build a 2,000-acre plant with a capacity to produce 150,000 EVs a year in Chatham County in the central part of the state of North Carolina. The company’s assembly lines in Haiphong, a city heavily bombed by the US during the Vietnam War, can roll out 250,000 vehicles a year. The company is also producing electric motorbikes, which are popular in remote provinces in the Mekong Delta.
Vietnam’s political leadership is seeking to adopt more technology as its moves to turn its major urban areas into smart cities. EVs are key to this effort, especially as more and more citizens rise up from poverty and move from rural areas to municipalities at a rate of 3 percent of the population a year. The introduction of more EVs on the roads would help address the pollution problem in the big cities.