Vietnam’s conglomerate Vingroup [VIC:VN] announced on August 23 that its automotive subsidiary VinFast would partner with Chinese battery manufacturer Gotion High-Tech [002074:CH] to build the first lithium iron phosphate (LFP) battery plant in Vietnam, as reported by Talk Vietnam on the same day. Compared with common lithium battery, LFP battery is much cheaper but less energy-dense. VinFast’s first electric vehicle (EV) would be available later this year, which would take it closer to its target of being a global EV brand. In addition to Gotion, VinFast also formed partnerships with battery companies from the US, Israel, and else.
VinFast started its global expansion plan in recent years, focusing on EVs. To enter the US market, VIngroup disclosed VinFast’s IPO plan this April, with a valuation of about USD60bn, according to Reuters. Vingroup worked with Credit Suisse Hong Kong for the listing, which was delayed for regulatory uncertainties in May. Despite this, in July, VinFast still announced its plan of expanding its businesses to North America and Europe and scheduled to start sales of its EVs first in the US in 2022. The company hoped that it could sell more than 15,000 units of its cars VFe35 and VFe36 in the US next year, considering the shortage of chips worldwide.
LFP batteries have now become hot components among EV producers. This May, Chinese automobile and battery producer BYD [1211:HK] and US EV maker Tesla [TSLA:US] released their LFP battery equipped EVs, respectively. BYD’s LFP battery models, Qin and Qin Pro, could cover 520km for each battery charging. Meanwhile, BYD also supplies LFP batteries to other Chinese EV developers such as GAC [2238:HK] and Changan Ford, a joint venture of Changan Automobile [000625:CH] and Ford [F:US]. Chinese automakers now prefer LFP batteries for safer and cheaper performances. For the first seven months, the installed capacity for LFP batteries in China reached 28.73 gigawatt-hours (GWh), accounting for 43.7% of the Chinese EV battery market.