This week, T-Mobile and VinFast announced that T-Mobile will be the sole provider of connectivity for Vinfast electric vehicles (EVs). The automotive industry is rapidly transforming into an electric-first, always-connected, and smart landscape.
This is not T-Mobile's first relationship announcement, nor do I expect it to be the last in its relationship with automotive companies. T-Mobile announced earlier this year (2022) its partnership with BMW to provide unlimited voice calling and unlimited 5G data to the 2022 BMW iX xDrive 50, which you can read about here. T-Mobile and VinFast's partnership will add four new vehicles to T-Mobile's list of connected vehicles, the VF6, VF7, VF8, and VF9.
Oftentimes when I look at these partnerships, I look through the lens of a company's value proposition. T-Mobile recently held its first industry analyst summit, which you can read about here, and in that, I came out optimistic about its business approach. Years ago, when T-Mobile was establishing its 5G strategies and roadmap, it was no question that automotive is one of the most considerable and obtainable applications and value propositions for 5G connectivity. For T-Mobile, partnering with automotive companies like VinFast expresses the Un-Carrier's desire to expand 5G into the automotive space continually.
VinFast on a global scale
VinFast is an electric vehicle company from Vietnam. It is a part of VinGroup in Vietnam, which is a leading private conglomerate in Vietnam that focuses on technology and industry, services, and social enterprise. VinFast was established in 2017 and owns a state-of-the-art automotive manufacturing complex with up to 90% automation in Hai Phong, Vietnam.
VinFast has recently made its way into North America, establishing offices in Los Angeles, California, with plans to build a factory in North Carolina. These are huge steps for VinFast and express how serious the company is about global expansion. According to VinFast, it exported its first batch of VF 8s in late November. The playing field for electric vehicles is continuing to ramp up with what seems like a new electric vehicle announced every day by already-established automotive brands. It needs an edge for VinFast even to have the slightest possibility of long-term success in North American and European markets. I believe this partnership is bigger for VinFast than for T-Mobile. I would be glad to see the success of VinFast in North America from a diversity standpoint, and most competition is good competition.
Always connected cars is no longer a luxury
This deal between T-Mobile and VinFast puts always-connected smart vehicles within reaching distance of the everyday consumer. Although more affordable than a 2022 BMW iX xDrive 50, the VF 8, the mid-size SUV, and the VF9, the full-size SUV, are available for reservations starting at around $42,000. VF 6 and VF 7 are projected to come in 2023. VinFast says these vehicles will come with built-in capabilities that power connected services like remote vehicle services, streaming media and games, safety features, Wifi hotspots, and over-the-air (OTA) updates.
T-Mobile's 5G and 4G LTE Nationwide coverage should enable these VinFast vehicles to be always connected, allowing for more safe vehicles, better-serviced vehicles, and overall a more immersive vehicle experience. The automotive industry's transformation toward a vehicle as a service (VaaS) model allowing for OTA updates and years of support after rolling off the shelf, should add value to the vehicle over time. VinFast will be leveraging T-Mobile's IoT Platform to manage, connect, and deliver services and maintenance to millions of vehicles worldwide.
The inclusion of Europe, even though T-Mobile is not present in Europe, is thanks to T-Mobile's European partners. T-Mobile says all VinFast vehicles will be built with a T-Mobile US44 SIM with international roaming. This solution is great for VinFast on two fronts: VinFast does not need another partner to access its global market, allowing for a quicker time to market, and VinFast can launch its service quicker over one individual operator.
While T-Mobile is the 5G leader in North America, I believe it still has more to come to expand its leadership. T-Mobile is getting more serious about its Business offerings and recently announced its Ultra Capacity spectrum on 5G SA nationwide. Although T-Mobile's always-connected vehicle services will be using 4G LTE, I have no doubt its 5G connectivity will support more advanced vehicle solutions in the near and long-term future.
While this deal may seem like the next step for T-Mobile in introducing its vehicle connectivity service to the masses, I believe it is a huge step for VinFast and T-mobile. VinFast only just recently made its way into global markets, and this multi-million dollar long-term agreement with T-Mobile gives it the edge it needs to make its way into North America and Europe.
T-Mobile is continuing to expand its connectivity leadership by adding four more vehicles to its always-connected service. My biggest takeaway from this deal is that T-Mobile has a lot of confidence in its coverage to be making a huge deal on a newcomer like VinFast. Its 5G covers 90% of highway miles in America, and its 5G coverage is more than Verizon and AT&T combined. In the possibility that VinFast is unsuccessful in North America, I don't see T-Mobile being hit too hard by the upset. I'm excited to see how this affects the automotive industry and the overall success of VinFast on a global scale.
Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.