Foreign auto companies test EV waters with luxury offerings

By Thanh Nhan   June 2, 2023 | 02:52 am PT
Foreign auto companies test EV waters with luxury offerings
Mercedes’ all-electric EQS 450 spotted on a Hanoi street. Photo by VnExpress/Luong Dung
Car manufacturers are increasingly bringing luxury electric vehicles to Vietnam to acquaint the market with EVs.

Unlike the popular EV segment, which has only one manufacturer, local firm VinFast, the high-end segment with vehicles costing billions of dong (VND1 billion = US$42,400) has attracted many global players.

All the luxury EVs currently sold in Vietnam are German.

In 2020, Porsche launched the first all-electric car in the market, the Taycan. In 2022 Audi brought the e-tron SUV and e-tron GT. Late last year, Mercedes brought the EQS, the top model in its EQ series, and plans to introduce three others, the EQB, EQE and EQS SUV this year.

BMW joined the EV race with the i7, the electric version in its flagship Series 7. Volvo plans to bring the C40 in 2023.

The only Asian luxury brand present in Vietnam, Lexus, remains loyal to the hybrid strategy, with most of its product range having a hybrid variant, except for large SUVs like the GX and LX.

The reason why there are only European brands is strategic.

"Mercedes, Audi, BMW... have a clearer level of commitment to and direction for EVs than Lexus," Nguyen Thanh Trung Hieu, business development director of EV One, a start-up specializing in charging station infrastructure and services for Evs, explained.

Most European luxury car manufacturers are betting on EVs because they have a road map to stop selling petrol and diesel cars.

The deadlines are 2030 for Mercedes and Volvo and 2033 for Audi. BMW does not have a timeline for eliminating petrol and diesel cars, but is nevertheless accelerating EV production by launching a series of them such as i7, i5, i3, and iX.

Europe is the only market in the world with an ambition to phase out internal combustion vehicles by 2035.
But for Lexus, EVs are only a part of its product diversification plan.

Still in introductory phase

The luxury brands’ first target in Vietnam is not the popular segment, which would bring the biggest sales, and instead they focus on introducing the most expensive and technologically advanced products targeted at affluent customers.

Mercedes’ EQS has a price tag of nearly VND6 billion. BMW’s i7 has a top-of-the-range price of nearly VND6.6 billion, while Audi’s e-tron GT sells at VND5.2 billion or more.

"Luxury EVs possess the most advanced technologies available today, but they cannot be a complete replacement for petrol cars yet," Vinh Nam, a manager at Mercedes dealer VietnamStar Binh Duong, said.

"Issues related to charging stations, charging time and running range are acceptable for wealthy customers who already own one or two cars, and buy an EV to experience more.

"Those who buy cars for the first time are still hesitant about EVs."

Luxury car manufacturers want to take advantage of the advanced technologies and performance offered by flagship models to gradually acquaint customers and the market with EVs and their presence on the road.

In the next two or three years, when the limitations of EVs are gradually overcome, the government has more support policies and EVs are more widely accepted, affordable EVs would start to be introduced, he said.

Not too focused on sales at this stage, luxury car manufacturers are hesitant to give out targets and other numbers.

A 180-kW fast charging station at the Audi Tan Binh showroom in Ho Chi Minh City. Photo courtesy of Audi

A 180-kW fast charging station at the Audi Tan Binh showroom in Ho Chi Minh City. Photo courtesy of Audi

During the launch of the e-tron GT RS in April, an Audi executive revealed that by 2025 EVs would account for 10% of his company’s sales in Vietnam.

Mercedes refused to speculate on EV sales, saying it is not easy to assess the market.

"Customer demand, charging station infrastructure and support policies for EVs help the EV market develop," Hieu said. "But these are weak in Vietnam now, and so the market is slow as well.

But many automakers believe the luxury EV market will still be in the introduction stage in the next one or two years, and so do not expect high sales.

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