Challenges remain for VinFast despite domestic success

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When you get behind the wheel of VinFast’s electric SUV crossover, the VF-8, it feels like you’re driving a supercomputer.

A large 15.6-inch display screen takes up the center console of the four-door, five-seat vehicle and controls nearly everything else in the vehicle from the air conditioning to the sunroof.

The design keeps the vehicle up to par with its EV competitors like the Chevy Blazer or Ford Mach-E, marketing EVs to the common person in the fight to win the American “green car” market.

To the everyday consumer, the VF-8 may look like a luxury vehicle. With 348 horsepower, 5.9 seconds to accelerate from 0-60 miles per hour and a charging range of 260 miles, it matches up well with its competitors — especially for VinFast’s first attempt at an SUV all-electric vehicle.

‘Not there yet’

But after test driving pre-production models of the car during the Vingroup Elite Vietnam Tour last week, some auto reviewers and experts said the while the car it stacked up to its competitors, it didn’t stand out. Andrew Lambrecht, a Charlotte native and contributor to Forbes Wheels, said he clocked the acceleration time at closer to 7.5 or 8 seconds and felt there were issues with the acceleration and braking.

“There’s quite a few software fixes that are needed before I’d want to buy it,” Lambrecht said. “It has the potential to be a really nice car, but it’s not there yet. It just doesn’t prioritize acceleration the way they said it would.”

Lambrecht said typical EV’s can be driven with one pedal because they slow down quickly after taking your foot lifts off the accelerator. But the lack of torque on the VF-8 made that difficult, he said.

The vehicle’s subpar performance has the potential to make it an even harder sell in the U.S. market, some said. But VinFast, and the N.C. government, have put a big bet on getting Americans to buy into its product.

“It’s going to be a really tough sell to the American market,” said Sebastian Blanco, contributing editor at Car and Driver. “It needs to stand out from the pack. It has the potential to, but at least in pre-production it’s not there yet.”

Last week, the company announced the opening of six showrooms across the California coast, and it has made prominent showings at the New York Auto Show to accompany the upcoming factory in Chatham County.

Michael Smith, the president of the Chatham Economic Development Corporation, said that’s an indication of VinFast’s commitment.

“These are all reminders of how serious the company is at being a successful EV manufacturer in the U.S. market,” he said, adding that VinFast has hired top attorneys and firms — some of which have years of experience in U.S. automotive projects — for its American projects.

The Vietnamese company also pledged to invest $2 billion in North Carolina for the initial phase of construction of its plant. VinFast has also pledged a total investment of $4 billion, accompanied by more than $1.2 billion in tax incentives from N.C.

The incentives include the N.C. Job Development Investment Grant of $316 million over 32 years; state appropriations of $450 million for site preparations, road improvements and additional water and sewer infrastructure; community college training worth $38 million; a Golden Leaf Foundation grant of $50 million; and $400 million in incentives from Chatham County.

The automaker is a young company, even in its home country. It’s uncommon to see VinFast cars on the roads of Ho Chi Minh City or Hanoi, but production is ramping up by the end of the year with the goal of capturing the global EV market.

The battery

The comany’s youth, accompanied with the mass capital growth of VinFast, are cause for both excitement and skepticism. The company is taking a gamble and trying something new: an EV battery subscription service.

To keep sticker prices of the car lower, VinFast is offering a 10-year warranty on an EV’s most expensive component — the battery. Consumers will have the option to lease batteries from the company for a small monthly fee. Once the battery life degrades to 70%, Vin-Fast swaps in a new one, free of charge.

It’s a unique proposition, especially if there is little about the vehicle itself to differentiate it from well-established automakers in the U.S. But it’s also confusing. The idea relies on the company being able to produce more batteries than an average EV company, and the math doesn’t always add up.

For example, earlier this week, Chevy announced its new EV Blazer with a sticker price of around $45,000; the sticker price of a VinFast VF-8 is about $41,000. It’s a similar range in price — so why, some on the tour asked, would consumers pay for the unknowns of VinFast along with its battery subscription service, when both are marketed for similar audiences?

Vingroup has undoubtedly invested a lot of money in ensuring its global success. The conglomerate has already sunk $6.6 billion into its operations, hiring and manufacturing. But even with deep pockets, there’s no guarantees of the company’s success.

According to recent reporting from Triangle Business Journal, Vingroup, the public parent company of VinFast, is trading at just $3 per share and has seen a 22% drop in year-over-year revenues. The numbers also show Vingroup’s stock price has dropped more than 30% in the past seven months.

When asked how consumers can trust the company given these figures, Thuy Le, VinFast deputy chief executive officer said, “The stock market is the stock market, we can’t control it. We are not alone in this hole.”

The deputy CEO said VinFast is just one part of the Vingroup finances, so she believes it may be unfair to project Vingroup’s trends onto VinFast.

Vingroup has also looked to go public in the U.S. with an IPO, but the date of that keeps getting postponed due to market conditions.

“We are in no rush to IPO, we will wait until the timing is right,” said David Mansfield, chief financial officer of VinFast.

The ‘fast’ in VinFast

In Vietnam, Vingroup is the first in everything they do. They’ve created electric vehicles, luxury housing, schools and resorts with blazing speed. But in the U.S., VinFast won’t be the first or the only company producing EVs. Ensuring the company’s success abroad will be no easy task.

Money and government incentives are certainly on their side, but ultimately the success of the company relies on consumers buying into the message and believing in the product too.

“Our core message is that we produce quality products, with premium technologies,” Thuy Le said. “We want value and affordability in the car and quality in our after-sales services. That’s what’s going to set us apart.”

Thuy Le said at the beginning of her career with VinFast, people accused the company of being “crazy” for saying they could produce EVs in just two years. But now, she says, seeing is believing.

“People didn’t think all of this was possible,” she said. “Reflecting on the past and looking toward now, we are audacious and we want to make things happen in the U.S. We have people, knowledge and backing from the state.”

Reporter Ben Rappaport can be reached at brappaport@chathamnr.com or on Twitter @b_rappaport.

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