The collaboration between VinFast and Marubeni reflects a proactive strategy to tackle environmental issues.
VinFast is actively collaborating with partners to tackle major challenges in the electric vehicle (EV) industry. For example, their focus on battery recycling addresses environmental concerns, while their partnership with BESS helps manage potential power grid strain—both critical for promoting widespread EV adoption.
Despite the fast growth of the EV sector, its real environmental impact remains questionable. Most of the world’s electricity grids, which power EVs, still depend significantly on fossil fuels such as coal and oil, highlighting concerns about the energy sources for EV charging. VinFast’s alliance with Marubeni represents a forward-thinking method to address these issues. By emphasizing battery recycling and incorporating renewable energy storage solutions, they are striving for a genuinely sustainable future for EVs. As the environmental movement gains momentum, this partnership supports VinFast’s position as a major player in the global EV market.
The shift towards electric transportation might seem positive as the world moves away from fossil fuels impacting the climate. However, the surge in electric cars could heavily burden the ageing electric grid, designed for a fossil fuel-driven world. Aram Shumavon, CEO of Kevala, cautions that failing to upgrade the grid in line with the EV expansion could cause charging issues for drivers, including long wait times, limited charging availability, and fewer locations.
The International Energy Agency (IEA) anticipates a dramatic rise to 245 million EVs by 2030. The success of electrification depends on significantly growing renewable energy sources. The main hurdle is efficiently storing this energy.
In 2023, power prices in the wholesale energy markets of several European countries occasionally dropped to negative values during daylight, as reported by The Guardian. This occurs when renewable sources like wind, solar, or hydro generate more electricity than needed, and it can’t be stored for later use.
The essential role of battery energy storage systems (BESS) in energy storage and distribution worldwide is becoming increasingly crucial. BESS, using rechargeable batteries, stores energy from various sources and releases it when needed, becoming vital as renewable energy sources grow. Under the recent memorandum of understanding (MoU), VinFast will supply used EV batteries, and Marubeni will use advanced technology from its strategic partner to recycle these batteries into cost-effective and easily manufacturable BESS without disassembling, processing, or repackaging the batteries.
Pham Nhat Quan Anh, Deputy CEO of VinFast Manufacturing Division, expressed enthusiasm about the collaboration with Marubeni to explore and deploy clean and innovative energy storage solutions, marking a significant step in VinFast’s strategy to establish a circular economy model.
BESS technology and EVs complement each other well. By storing excess renewable energy and releasing it as needed, BESS helps stabilize the grid and makes EV charging more economical and environmentally friendly, encouraging broader EV adoption. The MoU mirrors VinFast’s ambitious target to reach net-zero emissions by 2040, including Scope 3 emissions, aligning with their principle of transitioning from a linear to a circular production model. This approach minimizes waste and resource use throughout the EV lifecycle. VinFast focuses on sourcing materials from environmentally responsible suppliers. For instance, their EV batteries, with up to 95% recyclability, come from leading battery companies with strong sustainability commitments. VinFast’s innovative battery subscription model ensures responsible battery management.
When a battery’s capacity falls below 70%, it is replaced, and the old battery is repurposed for energy storage. Additionally, their global partnership with Li-Cycle, a renowned Canadian recycling company, ensures proper battery recycling. VinFast’s commitment to battery recyclability and lifespan extension extends further with ongoing research to optimize these vital aspects.
Founded in 2017 by Vingroup, Vietnam’s largest private conglomerate, VinFast entered the Nasdaq stock exchange. Their diverse electric SUV range caters to various consumer needs and budgets. VinFast’s strategic move into BESS research isn’t just about responsible battery disposal—it’s a business initiative with the potential to turn used batteries into valuable assets within a multi-billion dollar industry.
The demand for energy storage solutions to complement renewable energy sources is skyrocketing. Bank of America identifies energy storage as a bright spot in the industry, with analysts predicting a boom. According to McKinsey & Company, the global BESS market is expected to double by 2030, reaching an impressive $120 billion to $150 billion. This growth is driven by over $5 billion invested in BESS in 2022 alone.
Major tech companies like Shell, Panasonic, LG, Samsung, Intel, and Tesla are already key players in the BESS space. VinFast, a newcomer to the automotive industry, sees potential in BESS. Despite significant investments required to establish themselves in the car market, founder Pham Nhat Vuong remains optimistic about reaching profitability soon, assuming smooth operations. This potential profitability could be enhanced by VinFast’s strategic position in the growing BESS market.
While domestic sales continue to be the primary revenue source, VinFast has seen promising growth in the U.S. market, with several new dealerships reporting sales. VinFast is well-positioned to secure a significant advantage for future growth.
