The partnership between VinFast and Marubeni signifies a proactive approach to addressing environmental concerns.
02 Jul 2024 | 3647 Views | By Autocar Professional Bureau
VinFast is actively collaborating with partners to address key challenges within the EV industry. For instance, their focus on battery recycling tackles environmental concerns, whereas their partnership with BESS aims to alleviate potential strain on the power grid – both crucial aspects for fostering large-scale EV adoption.
Despite the rapid growth ...
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VinFast is actively collaborating with partners to address key challenges within the EV industry. For instance, their focus on battery recycling tackles environmental concerns, whereas their partnership with BESS aims to alleviate potential strain on the power grid – both crucial aspects for fostering large-scale EV adoption.
Despite the rapid growth of the EV industry, questions linger about its true environmental impact. The electricity grids powering most of the world still rely heavily on fossil fuels like coal and oil, raising concerns about the source of the energy EVs use to charge.
The partnership between VinFast and Marubeni signifies a proactive approach to addressing these concerns. By prioritising battery recycling and integrating renewable energy storage solutions, they aim to ensure a truly sustainable future for electric vehicles.
As the green movement gains unstoppable momentum, the deal paves the way for
VinFast's long-term viability as a key player in the global EV landscape.
Grids Under Strain
The electrification led by the transportation sector would seem to be good news, as the world tries to wean itself off fossil fuels that are wrecking the global climate. Nonetheless, the boom in electric cars could put a major pressure on the electric grid, an aging system built for a world that runs on fossil fuels. Aram Shumavon, CEO of Kevala, warns that a failure to modernize the grid alongside the EV boom could lead to charging headaches for drivers - long queues, limited charging times, and
restricted locations.
The International Energy Agency (IEA) predicts a staggering 245 million EVs on the road by 2030. However, electrification's effectiveness hinges on a significant expansion of renewable energy sources. The challenge lies in storing this energy efficiently.
Back in 2023, several European countries had power prices in the wholesale energy market dip into negative values during daylight hours, The Guardian reported. This happens when renewable energy sources such as wind, solar, or hydro produce a large quantity of electricity that exceeds demand and cannot be stored for later use.
It emphasises the pivotal role of battery energy storage systems (BESS) in the way the world stores and distributes electricity.
BESS is defined as a mechanism that uses rechargeable batteries to store energy from various sources and releases it when needed. As renewable energy sources become more prevalent, battery storage systems are becoming increasingly important for maintaining a stable and reliable
grid.
Under the recent MoU, VinFast will supply used EV batteries, and Marubeni is expected to leverage exclusive technology from its strategic partner to recycle VinFast's electric vehicle batteries, repurposing them into affordable and easily manufacturable BESS without the need for disassembly, processing and repackaging of the batteries.
“We are delighted to collaborate with Marubeni to jointly research and implement clean energy and innovative energy storage solutions”, Pham Nhat Quan Anh, Deputy CEO of VinFast Manufacturing Division said, emphasizing that this signing marks a significant step in VinFast's strategy to establish a circular economy model.
BESS technology complements EVs perfectly. By storing excess renewable energy and releasing it when needed, BESS helps stabilize the grid and make EV charging more cost-effective and environmentally friendly for consumers. This collaboration ultimately aims to encourage wider EV adoption.
The MoU reflects VinFast’s ambitious goal of achieving net-zero emissions (including Scope 3 emissions) by 2040. This target aligns with their core principle: transitioning from a linear production model to a circular economy.
This circular approach minimises waste and resource consumption throughout the EV lifecycle. VinFast prioritises sourcing materials and products from environmentally responsible suppliers. For example, their electric vehicle batteries, boasting up to 95% recyclability, come from leading battery companies with strong sustainability practices. VinFast's innovative battery subscription model ensures responsible battery management.
When a battery's capacity dips below 70%, they replace it and repurpose the old battery for energy storage. Furthermore, their global partnership with Li-Cycle, a well-established Canadian recycling company, guarantees proper battery recycling. VinFast's dedication to battery recyclability and lifespan extension goes even further, with ongoing research efforts to optimise
these crucial aspects.
Founded in 2017 by Vingroup, Vietnam's largest private conglomerate, VinFast debuted on the Nasdaq stock exchange. Their diverse range of electric SUVs caters to a variety of consumer needs and budgets.
From Used Batteries to Multi-billion Industry
VinFast's strategic foray into BESS research isn't just about responsible battery disposal -it is a business move with the potential to turn used batteries into gold 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 poised to double in size by 2030, reaching a staggering $120 billion to $150 billion. This explosive growth is fuelled by over $5 billion invested in BESS in 2022 alone.
Tech giants like Shell, Panasonic, LG, Samsung, Intel, and Tesla are already major players in the BESS space. VinFast, a relative newcomer to the automotive industry, recognises the potential in BESS. Despite significant investments required to establish themselves in the car market, founder Pham Nhat Vuong remains optimistic about achieving profitability soon, assuming smooth operations. This potential profitability could be bolstered by VinFast's strategic positioning in the burgeoning BESS market.
VinFast founder Pham Nhat Vuong exudes confidence in the company's future, recently telling Bloomberg, "VinFast will reach break-even point soon and be able to stand on its own feet." He added, "I'm not worried about electric vehicle sales. The growth of electric vehicles will be inevitable."
These statements reflect VinFast's first quarter of 2024. Following their global growth roadmap, they launched their brand in Thailand and Indonesia, established a foothold in the Middle East, began construction of a manufacturing facility in India, and expanded their global sales network.
While domestic sales remain the primary revenue driver, VinFast recorded 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.