VinFast's Battery Subscription Service Could Backfire

Electric Vehicles / Comments

There are pros and cons to it.

VinFast is a Vietnamese brand that looks to be approaching the EV sphere with dedication. It'll soon be introducing its pair of EVs to the North American market with 60 showrooms planned for the USA. If its VF 8 or VF 9 SUVs look appealing to you, reservations for this dynamic duo are already live on its local website.

What the brand understands coming into the market is that the cost of getting into the seat of an electric car is not exactly affordable. To alleviate this, it has devised a unique proposition that will see it leasing out just the battery packs in a bid to lower the initial purchase price. By adding it as a subscription, owners will also not have to concern themselves with replacement costs when the pack expires. That sounds good, but is it?

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Speaking to Automotive News Canada, VinFast Canada CEO Huynh Du An explains that to hit the market with a competitive stride, it needs to implement a strategy that will make its products more financially appealing than the likes of much more established products like the Tesla Model Y.

"VinFast did collect both qualitative and quantitative market feedback regarding battery subscription," explains the CEO. "Key findings included that a lower price of entry was intriguing to consumers, and they appreciated support plans the subscription provides."

Subscriptions are nothing new to the automotive world. General Motors confirmed that it would be adding more digital services with monthly payments to its product offering. This is the first time that we've seen the model applied to a physical component though, and not everyone is convinced.

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The battery pack is a resource-intensive component to produce so removing it from the price of a car and adding it as a subscription service could translate a more appealing proposal upfront but an automotive analyst at GlobalData, Michael Vousden, highlights that this strategy does have its downside as it could create long-term frustrations for customers that have to deal with "two separate payments for one vehicle."

The battery subscription will be available for both the VF 8 and VF9 but it's not yet clear how much this will slice off the $41,000 and $56,000 respective MSRP. EV incentives where applicable will make these cars even more attractive but Du An insists that its sales strategy is not relying too much on federal subsidies. He promises that "VinFast will offer a market-leading range of products to customers." Let's hope they're affordable.

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Source Credits: Automotive News Canada

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