Unburdened by the Past: VinFast and the Emergence of Pure-Play EVs

While established car manufacturers grapple with the costly transition from ICE to EV, pure-play EV companies are emerging as agile and innovative players in the market.

Unburdened by legacy technologies and ICE supply chains, these companies are laser-focused on EV development, embracing cutting-edge technologies and sustainable practices. This is a global phenomenon, evident in the emergence of EV companies in the Middle East, such as Ceer and NWTN. However, one notable example stands out for its rapid growth and ambition: VinFast.

VinFast, the car-making arm of Vietnam's largest private conglomerate, Vingroup, has made remarkable strides in the EV market in less than five years since its founding. The company transitioned to become a fully electric vehicle manufacturer in 2021, delivering its first self-developed EVs to Vietnamese customers in December of that year. And thanks to Vingroup's expertise and resources, VinFast was able to construct a modern car factory in record time, a feat that usually takes traditional automakers years to accomplish. This rapid progress is a testament to VinFast's agility and ambition, earning it recognition on TIME's list of 100 most influential companies in 2024.

VinFast's ambitions extend beyond its home market. The company has expanded its footprint globally, establishing a presence in the Middle East through partnerships with distributors and previously in other key markets like Southeast Asia, India, and the US. This global expansion demonstrates VinFast's commitment to making electric mobility accessible to a wider audience.

All-In on EVs

In its April report, the International Energy Agency notes that EV companies' stocks have outperformed general stock markets and traditional carmakers since 2019. This highlights the growing potential of this sector and the long-term growth prospects of pure-play EV companies like VinFast.

However, the transition to electric vehicles is not without challenges. Competition in the EV market is intensifying, and pure-play companies need to scale up their production and build strong brand recognition to remain competitive. The EV industry as a whole faces infrastructure limitations, such as the availability of charging stations, and needs to address consumer pain points like charging times and range anxiety.

But it's only in this difficult backdrop that we are able to see one notable advantage of pure-play EV makers: Their unwavering commitment to going green. This obligation to adapt and innovate differentiates them from traditional automakers who might hesitate or hedge their bets by turning to half-measures like hybrids.

In VinFast's case, their desire to go green is baked into its DNA through the unwavering commitment of its founder and also chairman of Vingroup, Pham Nhat Vuong, Vietnam's richest man. Vingroup, its affiliates, and external lenders have provided VinFast with over $12.9 billion to fund operating expenses and capital expenditure between 2017 and March of this year. Vuong himself recently pledged another $1 billion to the company's success.

Dedicated EV manufacturers are all-in on electric vehicles, not backing down from challenges. As the EV market matures and technology advances, pure-play companies are expected to play a crucial role in shaping the future of mobility.