VinFast faces trial by fire in N. American EV market

VinFast is celebrating the arrival of its first electric vehicle on U.S. shores, the VF 8 midsize crossover. But it's also getting pushback for introducing a $56,700 vehicle with just 179 miles of battery range.

And that's not all of its struggles.

The Vietnamese automaker, which moved quickly into the U.S. after first showing the VF 8 in 2021, is also facing headwinds after last year's Inflation Reduction Act removed the $7,500 EV tax credit for vehicles made outside North America.

And one of the brand's key selling points, a battery-leasing model that reduces the purchase price but adds complexity, hasn't received much traction. The base VF 8 can now be bought with the battery, starting at $56,700 including shipping. The battery lease requires a monthly payment tied to miles driven.

The newcomer brand has received about 12,000 U.S. reservations for the VF 8 and its larger three-row VF 9 crossover, a company representative said. Deliveries of the handsomely styled VF 9 are expected to start in the second quarter.

To be sure, it's early in the game for VinFast, which made its first combustion vehicles for the Vietnamese market in 2019 and only began making EVs in 2021. The automaker is moving forward to build an assembly plant in North Carolina and is developing two smaller electric crossovers for North America. It has also filed for an initial public offering in the U.S. to fund its international expansion.

"I think there's enough room for lots of players to be a contributor to green mobility," VinFast CEO Le Thi Thu Thuy said last month on the "Driving with Dunne" podcast. "We would like to be one of them."

Thuy told host Michael Dunne, CEO of consultancy ZoZoGo, that VinFast had opened 10 showrooms in California, its first U.S. market, and is interested in expanding next to the East Coast.

VinFast is part of the conglomerate Vingroup, which runs hospitals, schools, hotels and vacation resorts in addition to automobile and electric scooter manufacturing in Vietnam. VinFast is dropping combustion engine production and using its EV lineup to expand to the U.S. and Europe.

The first shipment of 999 VF 8 crossovers arrived in California last month. Deliveries are expected this month for customers, including fleet provider Autonomy, which has ordered 2,500 units of the VF 8 and VF 9 for its subscription model.

VinFast's first EV for the U.S. and Canadian markets has been highly anticipated after the company put out a steady stream of news releases touting the vehicle's features. The company participated at industry events including the Los Angeles Auto Show and CES for two years running and flew auto reviewers to its Vietnamese resorts for short VF 8 drives.

But until recently, VinFast had not published detailed U.S. vehicle specifications or made production versions of the VF 8 available for testing.

"There was a lot of initial pomp and circumstance when VinFast announced its plans to enter the U.S. marketplace," said Robby DeGraff, industry analyst at AutoPacific. "Big marketing pushes highlighted potential cutting-edge tech, exhilarating and powerful driving dynamics and bold styling."

So it came as some surprise that the first version of the VF 8 arriving to U.S. customers has just 179 miles of EPA range from a relatively large 82-kilowatt-hour battery. A similarly configured Hyundai Ioniq 5 has 266 miles of range at a lower price. Other EVs, such as the Kia EV6, Volkswagen ID4 and Ford Mustang Mach-E, also have better range at lower prices.

VinFast said on its U.S. website that a software update will be forthcoming to increase the range for the VF 8 model now being delivered, which is called the VF 8 City Edition. The VF 8 can also be ordered with a larger battery.

DeGraff said he'd rather have any of the VF 8's competitors, including the Chevrolet Bolt EUV, which costs about half the price, has greater range and still qualifies for the tax break of up to $7,500. Likewise, he said, the VinFast battery subscription is confusing because EVs generally come with their battery included.

In recent months, VinFast has allowed the public to drive the VF 8 on a closed course and to be driven around on streets, including at CES this month in Las Vegas.

A YouTube video on the Out of Spec Reviews channel, titled "I Drive the VinFast VF 8 for the First Time! And I Really Wish I Didn't," took issue with the look of interior trim pieces, body rattles and interior noise. Conversely, reviewers on the channel praised the exterior styling.

"I wonder if VinFast is like, 'Let's get the early cars out and we'll just change and update hardware as they go' ... or if it's always going to be like this," Kyle Conner, founder of Out of Spec Studios, said in the video after a brief drive in Las Vegas. "I'd give it a 3 of out 10 [points], which means totally livable, drivable but could never choose it."

At CES, VinFast announced it would start taking reservations for its VF 6 subcompact and VF 7 compact crossovers in March. The new models are expected to have range of over 200 miles and come in base Eco and higher Plus trims, the automaker said.

"VinFast always strives to bring diverse vehicle options to meet the demands of most customers, while pushing the transition from ICE to all-electric vehicles," Thuy said in a press release. "VinFast's VF 6 and VF 7 are models that combine the elements of style, modern technology and outstanding technology in an efficient and fun package."

While the automaker hurtles forward with its plans for a four-vehicle lineup of EVs for the North American market, DeGraff suggested the brand might need to slow down and focus on creating a positive first impression among consumers.

"VinFast needs to pump the brakes and reevaluate its strategy," DeGraff said. "Slashing the VF 8's price would help to an extent, but there is much more work that needs to be done and awareness of the brand to be built beforehand."