VinFast to require its EV buyers to also buy subscription
The EV startup VinFast revealed this week that it will bind its vehicles' U.S. buyers to a monthly battery subscription.
Why it matters: Drivers who purchase a VinFast EV will have to pay up to an extra $160 a month simply to drive the vehicle.
- Buyers who don't opt for the "unlimited" package could find themselves shelling out even more in mileage fees.
Driving the news: VinFast, a Vietnamese startup, is launching two SUVs in the U.S.: a two-row midsize SUV starting at $40,700, and a three-row full-size SUV starting at $55,500.
- In addition to the sticker price, buyers will also have to cough up for the vehicles' batteries: From $35 or $44 a month, plus mileage fees after 310 miles. Or $110 or $160 a month for an unlimited subscription.
By the numbers: The average American in 2019 drove more than 1,200 miles per month, per the Federal Highway Administration.
What they're saying: Not much. VinFast, in a press release, said that it's effectively "separating the price of the battery from the acquisition value of the automobile," which helps defray the upfront cost.
- The company did not respond to requests for comment.
Flashback: Renault-Nissan introduced a similar battery-subscription model for certain EVs in Europe, but the programs were largely discontinued after only a few years, industry experts tell Axios.
The big picture: More automakers are introducing subscription pricing, and for features that drivers might have once taken for granted — from Lexus, Toyota and Subaru charging a fee for drivers to unlock their vehicles through an app, to BMW pondering whether to charge drivers monthly for heated seats.
- The approach was popularized by Tesla. It represents how automakers are trying to reposition their products as software instead of hardware — which, if successful, would unlock billions of dollars in new revenue.
- But VinFast's proposal marks one of the first times an automaker in the U.S. will require buyers to pay more simply to drive the vehicle they've already bought.
- "The impact on up-front vehicle cost appears to be relatively minor," Rob Haslehurst, a managing director at the consulting firm L.E.K., tells Axios. "Across the average time of owning a vehicle, the subscription cost would only be 10%-20% of the sticker price, so it doesn’t feel like it meaningfully changes the relative price."
Nissan did not respond to a request for comment before publication.