Pham Nhat Vuong’s VinFast is building e-scooters at a $3.5 billion factory in Haiphong.
Vietnamese billionaire Pham Nhat Vuong wants to help his nation’s 96 million motorbike riders go green, replacing their noisy gas guzzlers with electric scooters. VinFast, a subsidiary of Vuong’s Vingroup JSC, has a new $3.5 billion, 36.1 million-square-foot factory in Haiphong, where it’s building e-scooters, electric buses, and electric cars. Vuong is betting Vietnam’s growing middle class, increasingly concerned about pollution, will embrace his electric revolution.
Motorbikes are vital to Vietnam’s economy and culture. In Hanoi and Ho Chi Minh City, the density of bikes at rush hour makes the street barely visible. Even sidewalks overflow with mopeds, which often transport as many as five people and goods including slaughtered hogs and refrigerators.
It could take up to 5 years for VinFast to be profitable, Vuong says. The unit started offering e-motorbikes in late 2018 and sold 50,000 last year. It’s aiming to sell 112,000 in 2020.
About 80% of scooters sales are expected to be electric by 2040, according to BloombergNEF—ahead of Southeast Asian peer countries.
The price of VinFast’s low-end e-scooter, one of three models, is 12.9 million dong ($557). A fourth model is on the way.
Vingroup also is building charging infrastructure, adding stations at malls and apartment complexes. In Hanoi it employs a team of technicians, who help riders in need of an emergency charge.
Vietnam was ranked the 15th most polluted country in the world in 2019, according to IQAir, an air quality technology company. Worsening air quality has cost the country as much as $13.6 billion. “The biggest challenge is to convince consumers to change their habits of driving gasoline bikes,” says Nguyen Thi Van Anh, the VinFast executive overseeing electric motorbike production. She adds, “We want people to understand that using electric vehicles will help reduce pollution emissions and thereby improve people’s health.”
By John Boudreau and Nguyen Kieu Giang. This story was originally posted on Bloomberg