VinFast pushes ahead despite early setbacks

SAN DIEGO — Vietnamese automaker VinFast is facing a rough patch on the road to breaking into the U.S. market.

New tax rules removed the $7,500 federal electric vehicle incentive for its imported vehicles last year. Its first model, the VF 8 crossover, was rated at just 200 miles of battery range by the EPA. Its competitor Tesla started an EV price war in January. And early reviews of the VF 8 suggest it was rushed to market and needs fine-tuning.

But VinFast isn't letting short-term problems cloud its long-term vision, North America CEO Van Anh Nguyen told Automotive News last week during the startup's first U.S. media driving event here.

Backed by Vietnamese conglomerate Vingroup, VinFast is preparing a North Carolina site for a U.S. plant, with production expected in 2025. In the meantime, the young automaker plans to bring four stylish EVs to the North American market from its modern factory in Vietnam, Nguyen said.

The VF 9 three-row crossover will be the second VinFast vehicle in the U.S. by this summer, followed by the compact VF 6 and VF 7 crossovers by the end of the year.

"When you're committed to your plan and have the means to execute your plan, then you just do it instead of listening to so much noise," Nguyen said. "The North American market has a lot of conditions for us to launch the brand here and make it the most important market for us."

While acknowledging that VinFast faces stiff challenges as an unknown brand in a highly competitive market, the automaker also has a track record of beating the odds, Nguyen said.

VinFast was founded in 2017, started making gasoline vehicles in 2019 and delivered its first EV domestically in 2021 while announcing plans for two others, the midsize VF 8 crossover and three-row VF 9.

This year, it began producing the smaller VF 6 and VF 7 in Vietnam after phasing out gasoline cars last year.

"When people know about us, know who we are, know about our product, I think they will like it," Nguyen said during a media event in San Diego. "There will be more reservations and orders when the brand awareness is higher in this market, when people know about us more," she said.

For now, VinFast has 17,000 reservations for the VF 8 and VF 9 in the U.S. and Canada combined, the company said. Since December, VinFast has imported about 2,100 VF 8 vehicles for sale in California, the automaker's first U.S. market, and 800 for sale in Canada. Most of them arrived in May and have not been delivered.

Nguyen spends most of her time in Raleigh, N.C., where she is also CEO of the company's new factory arm, VinFast Manufacturing US LLC, rather than at the automaker's North American headquarters in Los Angeles. She said the brand will expand from its current 14 retail locations in California to 28 by the end of this year and later branch out to additional U.S. markets.

Earlier in the month, VinFast announced new financing from Vingroup founder Pham Nhat Vuong, Vietnam's richest person. It also announced a planned U.S. listing on the Nasdaq. The listing, through a merger with Black Spade Acquisition Co., is expected to close in the second half of the year, the company said.

The funding, including up to $2.5 billion from Vuong and Vingroup, is needed for the automaker's expansion into North America and Europe as it bets on global markets for rapid growth.

VinFast announced this week it will also expand in Asian markets.

The influx of money also buys VinFast time as it works out some early issues in the U.S. market.

"It's going to take a long, long time for VinFast to transform into a successful U.S. player in this market, which isn't easy to do," said Robby DeGraff, product and consumer insights analyst at AutoPacific.

The automaker's first shipment of 999 VF 8 to U.S. shores was marred by official range figures of 207 miles for the base Eco model and 191 miles for the higher Plus trim. Most rivals offer at least 250 miles of range.

VinFast said the December shipment only included a low-range version of the VF 8 called the City Edition and that a longer-range VF 8 Standard Edition will replace it. The first Standard Edition models, with about 250 miles of range, arrived in California in mid-May, VinFast said, and will be delivered in June.

VF 8 Standard Edition pricing starts at $47,200 for the Eco and $53,000 for the Plus. Both prices include shipping. The City Edition remains lease-only and will be phased out, VinFast said.

After Tesla's price cuts in January, VinFast cut its monthly lease price for the VF 8 City Edition to $399 from $599. More recently, the starting price for the Standard Edition was reduced by $3,000 from VinFast's original estimate of $50,200 in March.

The automaker also paused plans to lease its EV batteries separately from the purchase price of its vehicles, which would have allowed for different payment plans depending on monthly mileage needs. VinFast said it's still working with its finance partners on battery leasing, given its complexity.

Last week in San Diego, production versions of the VF 8 were handed over to automotive journalists, and the reviews have been mixed.

Edmunds summed up some of the concerns with the early batch of VF 8s, which were the City Edition models, by complaining about tuning issues with the accelerator, brakes, steering and suspension. Edmunds also said it found build-quality issues and described the interior as "boring but clean."

VinFast markets the VF 8 as a premium vehicle.

Edmunds praised the VF 8's technology, including a large infotainment screen to control myriad functions, a head-up display in lieu of an instrument cluster and advanced driver-assistance features. And with standard dual-motor all-wheel drive, the crossover is quick to accelerate.

"While we could give VinFast a break given how new the company is, the simple truth is that the VF 8 City Edition simply doesn't match the standard set by the competition," Edmunds said.

A VinFast representative said reviews from the 45 journalists and nine social media influencers it hosted "have been balanced" and that the automaker "is committed to making continuous improvements in every phase of our business including vehicle software updates and fine tuning."

DeGraff said VinFast needs to do a better job with the VF 9 launch when it comes to the U.S. this summer. The starting price of the VF 9 is $84,200 with shipping, according to VinFast's website.

"VinFast will only be able to push a pricey crossover with mediocre range and subpar quality onto consumers for so long until reality hits them," DeGraff said. "I honestly want them to succeed here because I admire their ambition, but you cannot rush this process. That will lead to failure."