VinFast has established a joint venture with LG Chem to produce battery packs for the Vietnamese start-up’s electric scooters and future electric cars. The two companies already signed a letter of intent in September 2018 to cooperate on EV batteries.
The production facility of the new joint venture is located in the northern port city of Hai Phong and covers an area of more than 12,000 square meters. While VinFast is responsible for the construction of warehouses and production lines, personnel and plant operation, the South Korean battery specialist will contribute its technical know-how as well as monitoring and training capacities.
In September it was announced that the investment in the factory would amount to 1.5 billion dollars and that operation could begin by the second quarter of this year. The duo has not officially confirmed these figures, however. Vo Quang Hue, deputy general director of Vietnam’s largest conglomerate Vingroup JSC, to which VinFast belongs, left it to general statements when announcing the joint venture: “The partnership with LG Chem to establish the battery production joint venture factory in VinFast’s plant complex is one of the important steps to ensure that VinFast’s electric scooters and electric cars will have batteries with high efficiency at suitable prices”. This is essential in view of VinFast’s goal of establishing a nationwide automotive and electric scooter manufacturing industry.
In the past few months, VinFast has concluded several contracts to promote electric mobility under its own roof. In late summer 2018, for example, the Vietnamese company signed an agreement with Siemens to supply technology and components for the manufacture of electric buses. The first model manufactured in Vietnam is scheduled to roll off the production line at the end of 2019. In addition, the German development service provider EDAG has received an order for the overall development of the first electric vehicle for the Vietnamese market. VinFast plans to score points in Southeast Asia with, among other things, a purely electric city vehicle. Last but not least, VinFast also made an agreement with General Motors some time ago, according to which GM will completely transfer its Vietnam business to VinFast. The startup in Vietnam will distribute GM’s Chevrolet models exclusively.