Yahoo Finance VinFast’s electric-vehicle pricing strategy revealed at NY Auto Show
It was a triple play of good news for Vietnamese electric vehicle (EV) maker VinFast, which touted an immense product display at this year’s New York Auto Show.
VinFast will not only sell cars in the U.S. starting later this year, but the company will also build a $2 billion factory in North Carolina to produce vehicles in the U.S. And if that weren't enough, the company has just filed for an IPO listing here in the U.S.
While VinFast didn't have much to say about the IPO filing, the company’s deputy CEO of global sales and marketing, Emmanuel Bret, had much to say about the company and its growing footprint.
“We have a long-term strategy of developing the brand all over the world, and [the] U.S. for sure is really a key market for us,” Bret told Yahoo Finance. “So we really want to attract all the American customers, because we think that we have a different offer and a really good one, which can be extremely successful in the U.S.”
With an aggressive fall deadline, the company plans to offer two of its crossover EVs — the VF 9 and smaller sibling VF 8. And at the NY Auto Show, VinFast finally revealed a detailed pricing structure for these cars.
In U.S. the VF 8 will break down into 2 trim levels (Eco and Plus), with two-sub trim levels based on range:
Eco (260-mile range): $40,700
Eco (292-mile range): $41,000
Plus (248-mile range): $47,700
Plus (277-mile range): $48,000
It’s a similar story with the larger VF 9 SUV:
Eco (272-mile range): $55,500
Eco (369-mile range): $56,000
Plus (262-mile range): $60,500
Plus (360-mile range): $61,000
VinFast is featuring straightforward pricing here with a simplified product lineup at the moment. What isn’t exactly straightforward, however, is that these prices don’t include the cost of the battery.
In a first-of-its-kind pricing strategy in the U.S., VinFast will lease the batteries on a monthly basis to customers for each car, meaning the customer actually does not own the battery. The batteries will have a lifetime warranty, and when they lose range and can’t be charged above 70%, VinFast will replace them.
VinFast revealed pricing for the "battery subscription" plan as they are calling it:
“The Flexible Plan is designed for customers who travel infrequently, with a monthly battery subscription fee of USD $35 for VF 8 and USD $44 for VF 9. This is a monthly fee for 310 miles of travel. From the 311st mile, the battery subscription fee per mile is about USD $0.11 for VF 8 and USD $0.15 for VF 9.
Rates for the monthly fixed subscription, which allows unlimited range, are $110 for the VF 8 and $160.00 for the VF 9. Customers who make a reservation and deposit for the VF 8 and VF 9 in 2022 with the Fixed subscription plan will be offered the same lifetime subscription fee. This policy is also automatically transferred to the new owner after the vehicle is sold.”
Bret says the battery plan tackles two problems head on, the first being pricing. Selling the car with the battery included could add roughly $10,000 or more for a 80kWh battery. “We have decided, yes, to go for battery subscriptions. Why? Because first of all, it gives us an opportunity to really have a low price, I would say, compared to the competitors,” Bret says. “[What] we want, once again, [is that] VinFast is for everyone, OK? So premium product for everyone.”
The plan also helps to addresses sustainability and lower the environmental impact. “Keeping the ownership of the battery gives us a responsibility and a control on the battery, so we will be in charge of the second life and even the recycling of the battery,” Bret said. “So this is extremely important for us to be able to really have the full control to the end of the lifecycle of the battery.”
It also doesn’t hurt that VinFast has created a new, recurring revenue stream for itself, one that Wall Street may come to appreciate when the VinFast IPO roadshow begins.
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Pras Subramanian is the senior autos reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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