Why are Chinese battery giants flocking to Viet Nam? Is the rise of VinFast an opportunity or a threat?
Viet Nam car brand VinFast has been in the limelight lately.
As an emerging electric vehicle company established only 6 years ago, VinFast not only dominates the domestic market, but also successfully landed on the United States NASDAQ, attracting global attention. But just as VinFast was shining brightly, an interesting phenomenon quietly happened - Chinese battery giants have set their sights on Viet Nam. Is this a coincidence? Or is there something else going on?
Let's take a look at VinFast's rise first. In 2017, Viet Nam's richest man, Pham Phong Thanh, founded VinFast, with great ambitions to build Viet Nam's national car brand.
In just a few years, VinFast has accounted for more than 90% of the electric vehicle market share in the domestic market, which can be called a dark horse. In August 2022, VinFast successfully landed on United States NASDAQ, with a market value of more than $80 billion, surpassing Ford and General Motors.
This series of impressive achievements can't help but make people sigh: Viet Nam can also build good cars?
However, VinFast's success is not accidental. The Viet Nam government strongly supports and provides tax incentives and subsidy policies; In addition, it has also cooperated with a number of internationally renowned enterprises to introduce advanced technology. But the most important thing is that VinFast has grasped the trend of electric vehicles and quickly seized the favorable position in the local market.
Just as VinFast was proud, the Chinese battery giants couldn't hold back. It is reported that a number of Chinese battery companies, including CATL and BYD, are actively deploying the Viet Nam market. Why is that? Was it because of VinFast's success? Or is there something else going on?
The fact that Chinese battery companies flock to Viet Nam is related to the rise of VinFast, but not the whole reason. First of all, Viet Nam is strategically located close to China and is an important member of ASEAN, so it has a unique geographical advantage. Second, Viet Nam's labor costs are relatively low, and the government is also welcoming to foreign investment. More importantly, Viet Nam is vigorously developing the new energy vehicle industry, and the market potential is huge.
But perhaps the most attractive thing for Chinese battery companies is Viet Nam's special position in international trade. Viet Nam has signed free trade agreements with many countries and regions, and products enjoy lower tariffs for exports. In contrast, China's battery exports face increasing trade barriers. By setting up factories in Viet Nam, Chinese companies can circumvent these obstacles and better explore the international market.
What does the arrival of the Chinese battery giant mean for VinFast? Is it an opportunity or a threat?
On the surface, this undoubtedly increases the competitive pressure on VinFast.
Chinese battery companies are technologically advanced and cost-effective, and may seize VinFast's market share.
But on the other hand, this could also be an opportunity for VinFast.
By partnering with Chinese companies, VinFast has access to more advanced battery technology; In this way, the competitiveness of its products will be enhanced.
At this time, the participation of Chinese companies will also promote the improvement of Viet Nam's electric vehicle industry chain and indirectly contribute to the development of VinFast.
But it's far from that simple. Although VinFast has an advantage in the local market, it still faces many challenges in the international market. Recently, VinFast had to postpone plans to build a $4 billion plant in North Carolina, United States, due to slowing market demand. This shows that VinFast's internationalization journey has not been easy.
At this stage, the development of Chinese battery companies in Viet Nam is not easy. Viet Nam's attitude towards Chinese goods is somewhat mixed, which may affect the market acceptance of Chinese companies. In addition, although the Viet Nam government is very welcoming to foreign investment, it is also vigorously supporting local enterprises, which may bring some policy instability to Chinese enterprises.
How will the Viet Nam electric vehicle market develop in the future? Will VinFast be able to hold on to its "one-third of an acre" and what role will Chinese battery companies play in this game?
The answers to these mysteries may only be revealed by time. What is certain, however, is that Viet Nam's electric vehicle market has become the center of global attention; A fierce competition is about to begin. Who will win in this competition? Is it VinFast, a local powerhouse? Or is it a Chinese battery giant that has mastered high-end technology? Or is it some other strong opponent that hasn't yet emerged? We can only wait and see what happens, and wait for the good news with great anticipation!
Regardless of the final outcome, this competition will promote the progress of Viet Nam's electric vehicle industry and even the entire Southeast Asian region. For buyers, this indicates that they will have more opportunities to choose and experience better product quality; From the perspective of the industry as a whole, its benefits lie in accelerating scientific and technological innovation, deepening improvement and broadening the industrial chain.
In the wave of global electrification, Viet Nam is making its mark! The potential of this emerging market is amazing. The rise of VinFast has set an example for other developing countries, proving that with determination and foresight, it is possible for any country to occupy a place in the emerging industry.
But success is not easy to achieve. Both VinFast and Chinese battery companies will face severe challenges. They must not only continue to innovate and improve product quality; We also have to deal with the ever-changing international business situation. In this process, whoever can capture the pulse of the market more accurately will be able to take the lead in the competition.
Finally, we can't help but ask: who will be the ultimate winner of this competition? Perhaps the real winner is not a single company or country, but the entire EV industry, all of us working for a cleaner, more sustainable future. In this race for the future of humanity, everyone involved is doing their part to build a better world. This is perhaps the most desirable outcome.
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