VinFast Economic Analysis: Key Factors Impacting EV Growth | Microeconomics | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

Introduction
Electric vehicles (EVs) are a promising technology for achieving a sustainable
transport sector in the future, due to their very low to zero carbon emissions, low
noise, high efficiency, and flexibility in grid operation and integration. This chapter
includes an overview of electric vehicle technologies as well as associated energy
storage systems and charging mechanisms. Different types of electric-drive
vehicles are presented. These include battery electric vehicles, plug-in hybrid
electric vehicles, hybrid electric vehicles and fuel cell electric vehicles. The
topologies for each category and the enabling technologies are discussed. Various
power train configurations, new battery technologies, and different charger
converter topologies are introduced. Electrifying transportation not only facilitates
a clean energy transition, but also enables the diversification of transportation’s
sector fuel mix and addresses energy security concerns. In addition, this can be
also seen as a viable solution, in order to alleviate issues associated with climate
change. Furthermore, charging standards and mechanisms and relative impacts to
the grid from charging vehicles are also presented.
VinFast (or VinFast LLC), the full name is Product Limited Liability Company
VinFast Manufacturing and Trading, is an established Vietnamese automobile
manufacturer in 2017. The company is a member of Vingroup construction and
real estate group and was founded by Pham Nhat Vuong. The company name
stands for the phrase "Vietnam - Style - Safety - Creativity - Pioneering" (the letter
Ph changed to F). - VinFast is a project in the field of automobile and motorbike
manufacturing - one of the leading industries, having an impact on many other
industries that Vingroup has only joined for more than a year.
With the aspiration to become the leading car manufacturer in Southeast
Asia, Vingroup has invested a lot in this project. By the end of the third quarter
of 2018, this group had poured more than 13,600 billion VND into VinFast, an
increase of more than 12,900 billion VND (equivalent to about 580 million
USD) compared to 685 billion VND at the beginning of the year. VinFast car
and electric motorcycle production project includes 5 specialized areas located
in Lach Huyen, Cat Hai, Hai Phong, expected to have a total investment of up to 4. 2 billion USD.
FACTORS AFFECT DEMAND AND SUPPLY (bổ sung)
1. VinFast is facing the opportunity to anticipate the future of the world,
change user habits: Vehicles using clean energy to replace internal
combustion engines are aglobal trend. With the advantage of environmental
protection, regardless of resources, electric motors anf cars are widely
applied, even becoming a mandatory requirement in some countries. High quality of Technology is applied.: What makes Klara the most confident is that the smart technologies will be applied by VinFast on this model
2. High quality of Technology is applied (affect supply): What makes Klara
the most confident is that the smart technologies will be applied by VinFast
on this model. Science and technology are important factors that help a first
Vietnamese car brand like VinFast compete with other famous brands in the
domestic market and can reach out to the world in the future.Although most
of the components are imported, VinFast has applied modern science and
technology in assembly such as using robots in most production processes,
which help speed up production, high accuracy and safety for humans.
Vingroup chose to go straight in order to increase investment efficiency.
Therefore, right from the beginning, they chose large-scale production
investment by building new plants with modern technology on the basis of
applying technology 4.0, meeting international standards.
To achieve the goal of producing high-quality cars that meet international
standards, VinFast has focused on finding qualified parts and components
suppliers. Some VinFast’s suppliers such as VAPA provides plastic
components, ABB provides 1200 robots for production, etc
3. Cultural environment: In Vietnam, people used to consider cars as a
product of great value, inappropriate in the context of agriculture being the
majority. However, at present, the usage trend of Vietnamese people is
shifting, cars are gradually becoming a popular means of communication in
urban areas and also gradually appearing in rural areas. The revenue of the
Automotive market increased dramatically in Q1/2022 compared to the
same period in 2021. According to the Vietnam Automobile Manufacturers
Association (VAMA), automobile sales in March 2022 increased by 60%
over February 2022. In Q1/2022, VAMA member units sold 90,506
automobiles of all types, up 27% from the same period in 2021.
(THE “BOOMING” OF VIETNAM’S AUTOMOBILE CONSUMPTION ) 4. Marketing. (affect demand)
VinFast has opened 70 showrooms in morethan 30 provinces in Vietnam to
directly sell itsgenuine car lines to customers. Moreover, customers can also
order and pay directly onVinFast's website and then receive their goods at
the showroom of their choice. This direct marketing channel helps VinFast
in reducing intermediary costs, contacting customers directly and receiving
direct input from customers in order to improve the product and suit the needs of customers.
VinFast approaches their customersthrough media such as TV, newspapers,
social networking platforms such as Facebook, Youtube, etc. They also use
influencers such as Ngo Thanh Van, SonTung MTP to increase brand
awareness. A variety of communication methods and covering social
media channels make VinFast a good premise for product launches. Vinfast marketing budget Marketing reseach Offline marketing Online Marketing Operation Others 6.70% 3.30% 33.30% 40.00% 16.70% ROLE OF GOVERNMENT:
In a recent report by the Ministry of Finance, electric cars currently account for
only about 2.6% of total car sales globally, but the growth rate is up to 50%. This
number shows that countries around the world are developing the trend of using
clean fuel vehicles to gradually replace fossil fuels. Not out of that trend, Vietnam
is also researching and issuing many tax incentives for electric cars to encourage
people to use clean vehicles and stimulate domestic automobile production.
Officially reduce Special Consumption Tax on electric cars
Special Consumption Tax (SCT) is an indirect tax levied on some special goods
produced and consumed by enterprises. Accordingly, this tax will be paid by
manufacturing enterprises, but consumers will have to bear the tax and the tax rate
will be added to the selling price of the product. To ensure state budget revenue,
automobiles are one of the items subject to a rather high STC.
To stimulate demand for electric car production, a number of preferential tax
policies were approved by the National Assembly, including reducing the STC on
electric cars. Accordingly, for battery electric cars with 9 seats or less, the STC rate
is 3% from March 1, 2022 to the end of February 28, 2027; from 1 March 2027 is
11%. In addition, for other types of electric cars, which carry people with 9 seats or
less, the STC rate is 15%, from 10 to under 16 seats is 10%, from 16 to 24 seats is
5%. the person who just carried the goods is 10%.
With this policy, the selling price of electric cars may be more attractive to users
without losing profits, thereby encouraging the goal of developing the production
and use of electric cars in Vietnam.
(The latest auto tax incentives 2022 – Magazine about Vinfast, by Hương Trà) CONCLUSION
The story of 'greening' means of transport must come from two sides, the business
and the state. In the world, many countries have been and are supporting policies
for businesses to develop and manufacture environmentally friendly vehicles, even
subsidies or support for consumers.VinFast's participation in the electric
motorcycle and especially electric cars segment will be a factor to promote this
industry.With the criterion of durability - smart - ecological, VinFast electric cars
areon the right track with the environment-friendly trend of the world 2-wheeled
vehicle industry, contributing to reducing noise pollution and emissions for the
community.With its solid financial potential, Vinfast aims to become one of the
leading modern and large-scale production complexes in the region, launching
luxurious, high-quality products and meet international standards.The dream of
Vinfast, the dream of Vietnamese people, can already begin to exist, not far from pioneering products.