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VinFast, Foxconn In Talks Over Partnership On Electric Vehicle Production

If the partnership gets the green light, it could be huge for both companies striving to dominate the booming electric vehicle industry.

VinFast, Foxconn In Talks Over Partnership On Electric Vehicle Production

The EV industry is seeing a growing interest around the world, as governments start implementing green policies. | Source: Shutterstock

Vietnamese automaker VinFast revealed last week that it was in early stage talks with Taiwan’s Foxconn about working together in developing batteries and other parts for electric vehicles — a partnership that could be huge for both companies striving to dominate the EV industry.

An article from Reuters said Foxconn has proposed to acquire EV production lines owned by VinFast. But VinFast prefers a partnership as it is keen to brand itself as an eco-friendly automaker, and wants to retain its EV business.

“Vingroup has received proposals from Foxconn but nothing is concrete yet. The partnership, if any, will focus on developing the batteries and electric car parts,” a spokesman for Vingroup said. “No decision on working together to produce EVs has been made yet.”

A member of the largest private corporation in Vietnam — Vingroup, VinFast is the country’s first fully fledged domestic car manufacturer and emerged as Vietnam’s number one car seller in a little less than two years since it established its automotive manufacturing complex in 2017. VinFast’s first gasoline-powered models hit Vietnam’s streets in 2019.

The company sold about 30,000 vehicles in 2020 alone, and expects sales of more than 45,000 for 2021. It is now preparing to launch its very first smart electric vehicles to the domestic market at the end of this year, and globally in 2022.

If the partnership gets the green light, Foxconn — the world’s largest contract manufacturer and Apple Inc supplier — is set to become a major provider of parts and services in the global EV market. And agreement with VinFast would follow deals with Fiat Chrysler, where it’s setting up a venture to develop EVs and internet-connected cars.

Foxconn already clinched a number of deals, one of its biggest is with Zhejiang Geely Holding Group. The company seeks to provide components or services to 10% of the world’s electric vehicles as early as 2025.

After last week’s announcement of the partnership discussion, shares of Foxconn rose as much as 3.6% on Monday.

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The growing interest in EVs

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Do EVs really present a sustainable solution to climate change? | Source: Shutterstock

The electrification of transport has become one of the major trends of the 21st century, as governments around the world strive to create greener policies.

Several countries have set carbon-neutral targets by 2050, and though it’s a fact that shifting to EVs alone cannot save the planet from climate change, the world seems poised for the transition.

In the US, President Joe Biden’s administration has put America’s transition to EVs front and center when they recommitted to the Paris Climate Agreement.

Do EVs really present a sustainable solution to climate change?

When considering energy efficiency across the full lifecycle of producing, transporting and using fuel – typically referred to as “well to wheel” – electric vehicles offer high efficiency and the lowest carbon emissions per mile, raising the potential for elimination of petroleum usage.

A report published by the California Environmental Protection Agency’s Air Resources Board said that an electric vehicle can travel three times farther than a gasoline-powered vehicle given the same amount of fuel energy.

Currently, EVs make up only a minute fraction in the automobile industry, which is currently dominated by internal combustion engines. But data from industry experts show that by 2040, EVs could make up 57% of all passenger cars.

Coming close to matching gasoline- and diesel-powered cars in purchase price, EVs actually cost less to operate, making it not just the most environment-friendly option for consumers, but more economically viable as well.

Last year, as overall car sales slumped by a fifth because of the coronavirus pandemic (which brought assembly lines to a standstill for months), sales of electric cars rose by 39% year on year to 3.1 million units. The trend is set to continue this year and through the decade.

As of December 2020, China had the largest stock of highway legal plug-in passenger cars with about 4.6 million units or 42% of the global fleet in use. The country also dominates the plug-in light commercial vehicle and electric bus deployment. The Chinese government has pushed for this shift to EV to assist energy conservation and security, and reduce the country’s reliance on oil imports.

Europe, led by Germany, has about three million plug-in passenger cars at the end of 2020, accounting for 30% of the global stock.

The US, meanwhile, had a cumulative sales of 1.74 million plug-in cars last year, with California as the largest market.

With the demand growing (and as governments issue policies favoring EV adoption), some of the world’s biggest automakers have also jumped on the bandwagon with their own styles of EVs, plug-ins and self-recharging hybrids. Nissan became the first company to mass-produce a contemporary EV.

But Tesla, GM, Mercedes, Audi, Toyota, BMW, Ford and many other new names in the car manufacturing industry have already started rolling out EV units, with more coming this year and beyond.

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VinFast at full speed

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VinFast is the country’s first fully fledged domestic car manufacturer and emerged as Vietnam’s number one car seller in a little less than two years since it established its automotive manufacturing complex in 2017. | Source: Shuttestock

VinFast has set big goals from the start — from being the country’s first local car brand to leading the EV transition in Vietnam, a nation synonymous with the motorbikes that clog its streets.

On January 26, the company announced that it has successfully developed the first three electric smart cars — VF31, VF32, VF33 — an important milestone that reaffirms the company’s vision to put Vietnam on the map of the automobile industry.

VinFast applies self-driving up to level 4 and other advanced technologies such as artificial intelligence, deep learning, facial recognition and multilingual virtual assistant. Depending on the model, the cars can go 300 to 500 kilometers per full charge.

In particular, the full-option versions of VF33, VF32 and VF31 own high-performance sensor systems including LiDAR sensors; 14 cameras are capable of detecting objects up to 687m away; 19 360-degree sensors allow warning and handling at high speeds (above 100km/h).

The self-driving system controlled by the Orin-X chip can process up to 200 GB of data per second, allowing control and navigation up to eight times faster than current generations. In addition, the full-option versions of all 3 models are equipped with some level 4 autopilot features such as automatic 3-dimensional map setting (first and only in the market), auto-detect parking slot and auto-parking; summoning vehicles... with the ability to connect with the transport system and smart cities, bringing comfort, safety and high-class experience to the users, read a press release from VinFast in January.

VF31 will start rolling by November in Vietnam. For the VF32 and VF33 models, delivery will begin in February 2022. Delivery to the US, Canada and the EU will begin in June next year.

The company has already started installing electric vehicle charging stations at commercial centers at Vinhomes Ocean Park, Vincom Long Bien and other areas to serve the first electric cars released by the end of this year.

The company also obtained a permit to test its autonomous vehicles on public streets in California, a requirement for VinFast to commercialize its electric vehicles in the US market.

The launch of smart electric vehicles, including electric scooters, electric buses and electric cars, is part of VinFast’s predetermined roadmap since joining the auto market three years ago.