No half-measures and all-in on electric: VinFast and the rise of the pure-play EVs

Legacy car makers are feeling the heat. Some brands are bleeding money on every EV sale, while others cling to hybrids, showcasing the legacy giants’ tightrope walk between the fading allure of the internal combustion engine (ICE) and the inevitable shift toward EVs.

Unburdened by legacy technologies, pure-play EV car makers like VinFast take a no-compromise approach to electrification, focusing solely on pure electric vehicles and avoiding half-measures like hybrids. This singular focus allows them to fully commit to the transition to electric vehicles.

Unburdened by legacy

Pure-play EV companies’ all-electric nature allows for a laser-like focus on the electric future. This is especially true for VinFast, which has capitalized on the expertise and resources of its parent company, Vingroup—the biggest private conglomerate in Vietnam with a multi-industry portfolio—to rapidly establish itself in the EV market.

Thanks to Vingroup’s support, it took VinFast a record 21 months to build a modern car factory on a piece of swampland—a feat that usually takes most automakers in the world 36 to 60 months. 

In another bold move, VinFast transitioned into a fully EV manufacturer in 2021, with its first self-developed EVs delivered to Vietnamese customers in December of that year. Notably, this occurred less than five years after the company’s founding, compared to the typical four to six years it takes legacy automakers to bring a new model to market. VinFast’s agility and ambition have earned it recognition, including a spot on TIME’s list of 100 most influential companies in 2024.

Unlike legacy automakers entangled in complex internal combustion engine (ICE) manufacturing and supply chains, pure-play companies like VinFast are free to innovate, experiment, and truly embrace the electric revolution.

Focused investment

Legacy automakers must split their investments between the old and the new. Pure-play companies, however, can channel all their resources into EV development and infrastructure. VinFast, backed by Vingroup’s financial might and billionaire founder Pham Nhat Vuong’s unwavering commitment, exemplifies this focused approach.

Despite challenging market conditions, Vuong, also known as the richest man in Vietnam, has showcased a strong commitment to the growth of VinFast. While Vingroup, its affiliates, and external lenders have provided VinFast with over $12.9 billion to fund operating expenses and capital expenditure between 2017 and March of this year, the founder himself recently pledged another $1 billion to the company’s success.

“VinFast will reach the break-even point soon and be able to stand on its own feet,” he said in a recent interview.

This concentrated investment, as seen in the case of VinFast and other pure-play EV companies, tends to translate to faster growth and expansion. An April report by the International Energy Agency supports this trend, finding that since 2019, the stocks of EV companies have consistently outperformed general stock markets and major traditional carmakers. In relative terms, these companies have experienced a greater increase in return on investment over the 2019-2023 period compared to their non-EV counterparts.

No half-measures

Pure-play EV companies often have sustainability baked into their DNA, resonating with eco-conscious consumers who seek brands aligned with their values.

That’s not to say the road is without its challenges for pure-play EVs, including fierce competition and the difficulties of scaling up. The EV industry also grapples with infrastructure limitations and lingering consumer doubts.

But as with any new technology, initial skepticism or challenges are part of the journey to widespread acceptance and are often temporary. As the market matures and technology advances, pure-play companies are well-equipped to embrace new innovations, refine their strategies, and sprint forward to an EV future.

Dedicated EV manufacturers are also uniquely situated to capitalize on the electrified mobility trend due to their unwavering commitment to their mission. Unlike traditional automakers who might hesitate or hedge their bets, these companies are all-in on electric vehicles.

VinFast exemplifies this unwavering commitment. Backed by Vingroup and the visionary leadership of Pham Nhat Vuong, the company isn’t interested in short-term gains or half-measures. Their long-term commitment to a greener future is fully electric, and they are determined to make it a reality.

A catalyst for change

The rise of pure-play EV companies is a noteworthy development in the automotive industry. Their agility, focused investments, and commitment to sustainability are contributing to innovation and pushing the industry forward. They are encouraging legacy automakers to adapt and accelerate their own EV efforts to remain competitive.

The transition to electric vehicles is more than just replacing gas-powered cars with battery-powered alternatives. It’s about transforming the automotive landscape, and pure-play companies like VinFast are playing a crucial role in this ongoing evolution.