Vietnamese automaker VinFast has delivered its first electric vehicles to U.S. customers, marking its official entry into the North America market.
VinFast, which cut prices on its VF 8 crossover last month, handed over the first 45 units of the midsize EV to customers at its nine California stores on Wednesday, the company said in a press release.
The vehicles were part of a shipment of 999 vehicles that arrived in California in late December. Deliveries were delayed until this month in order to install a software update, VinFast said.
"It's extremely gratifying in fulfilling our delivery promise and to witness the excitement our customers have for the VinFast brand," said Gareth Dunsmore, deputy CEO for global sales and marketing.
The first batch of VinFast crossovers are a limited version called the VF 8 City Edition, available only as part of a $399 per month lease. The lease promotion was cut from $599 per month in February.
VinFast said the new promotion came "in order to stay competitive with other brands."
Tesla Inc. sharply cut pricing on its Model Y crossover in mid-January, making it competitive with the VF 8. The Model Y starts at $56,630 with shipping while the VF 8 starts at $60,200 with shipping. The VF 8 City Edition, available only as a lease, has a starting price of $50,200 with shipping.
The Model Y qualifies for the $7,500 federal EV tax credit, because it is made in North America. The VF 8, imported from Vietnam, is only eligible for the credit as a lease vehicle due to a quirk in the incentive rules.
The current edition of the VF 8 also has limited range compared with EVs in its segment. The Eco trim has 207 miles of range and the Plus edition has 191 miles, VinFast said. Most competitors have around 250 miles of range and some have more than 300 miles, including the Model Y.
VinFast plans to import and deliver the larger, third-row VF 9 crossover later this year.
Analysts say VinFast faces major challenges in the U.S. because it's an unknown brand that only recently began making EVs in its home country. VF 8 competitors include mainstream vehicles such as the Ford Mustang Mach-E, Volkswagen ID4, Hyundai Ioniq 5 and Kia EV6. It's also priced similarly to luxury vehicles from Polestar and Volvo.
VinFast cut jobs in North America last month as it consolidated its U.S. and Canadian operations, the company said. Its North American headquarters is in Los Angeles.
Also last month, VinFast said it received one of the permits it needs to begin construction on an assembly plant in North Carolina.