HO CHI MINH CITY -- Vietnam's Vingroup has unveiled a lineup of electric vehicles to gain a foothold in the American and European car markets, an effort to be partly funded by an upcoming $302 million bond issue.
Vingroup subsidiary VinFast will produce three sport utility vehicle models that use artificial intelligence to run autopilot features such as steering, parking assistance and 3D mapping, Vietnam's biggest private company announced late last week. Known as VF31, VF32 and VF33, the SUVs are built using a category of Orin chips made by graphics processing giant Nvidia for autonomous vehicles.
Vingroup said it will start taking orders for the SUVs in November, with plans to deliver them to U.S., Canadian and European drivers in June 2022.
The conglomerate, founded by Vietnam's richest man, separately said last week it will borrow 6.98 trillion dong ($302 million) through corporate bonds. The bonds, to be issued starting in February, will help finance the company's phone division, Vinsmart, as well as VinFast, which is not expected to turn a profit for several years.
"This is a solid foundation for VinFast to reach its global vision and become a popular high-tech electric vehicle company in the world, as well as develop green transport ecosystem and reducing emissions [of CO2]," Vingroup said of its auto research and development.
It added that Vietnamese buyers will receive their electric SUVs as early as November, though the country of nearly 100 million people lacks much charging infrastructure. The infrastructure is also ill-prepared for the increasing popularity of four-wheeled cars, which struggle to navigate narrow roads and find city parking.
VinFast sold 29,485 cars last year in Vietnam, an increase from 2019, when they started production, but far fewer than its production capacity of 250,000 vehicles a year, according to Vingroup. The company needs to open new markets to make use of that spare capacity as soon as possible.
Vietnam remains one of the world's biggest markets for gas-guzzling motorbikes, which are sold for as little as $300. VinFast is trying to change that. In a prelude to the electric SUVs, it introduced battery-powered motorbikes in 2018.
As a mass-market auto manufacturer championed by the government, VinFast has the scale to get more consumers to go electric, especially amid rising health and environmental fears over fossil-fuel pollution. It also produces electric buses.
But traditional motorbikes, some half a century old, still reign supreme, and the electricity supply is not guaranteed for e-bikes. The power grid has failed to keep up with increased demand from consumers and especially from factories, which have ramped up production for an influx of investors relocating from China next door.
Vietnam's government said this month it will cut renewable energy production in 2021 because the electric grid cannot accommodate it, local media reported.
In addition to electric cars, VinFast aims to export cars with internal combustion engines and turn Vietnam into a regional auto producer. Its parent company, Vingroup, operates in an eclectic range of sectors including real estate, tourism, and health care, but has switched its focus in recent years to high-value technology such as automobiles and smartphones.