Vietnam’s electric vehicle (EV) manufacturer, VinFast, created a buzz with its US debut last year, witnessing a remarkable 255% surge in shares on its Nasdaq premiere following a SPAC merger with Black Space Acquisition. This propelled it ahead of both Ford (F) and General Motors (GM) in market capitalization.
Despite the initial success, VinFast faced a substantial decline, with its stock value dropping by around 90%, and the market response to its first global vehicle, the VF8, receiving disappointing feedback.
In response to this, VinFast decided to change its approach and announced plans to introduce a $20,000 car, unveiled at CES in Las Vegas. The compact VF3, with a driving range of approximately 125 miles on a full battery charge, is poised to be one of the smallest options in the American market.
VinFast’s Chairwoman, Le Thi Thu Thuy, revealed that the company’s original plan did not include introducing this model to North America. However, market research indicating Americans’ preference for larger cars prompted a shift in strategy.
During Thuy’s visit to the US in September to connect with dealers and showcase the VF3, positive feedback, and encouragement from dealers led the company to target the budget car market segment.
Despite this adjustment, VinFast faces challenges in making a significant impact in the rapidly growing American EV market. Delivering around 21,200 vehicles in California by the third quarter of 2023, VinFast lags behind Tesla, which alone delivered over 435,000 vehicles in the same period.
VinFast’s pricing strategy, with vehicles priced between $47,000 and $53,000, faces difficulties in marketing, particularly at a time when American consumers are cautious about transitioning to electric vehicles.
A Kelley Blue Book report indicates record-high EV sales of over 1.2 million vehicles in 2023, but growth is slower compared to the previous year, with consumer concerns about range, cost, and infrastructure identified as key barriers.
Thuy emphasized VinFast’s commitment to appealing to the mass market by prioritizing affordability and addressing everyday consumer needs. To meet these goals, VinFast is constructing a $4 billion EV factory in North Carolina’s Chatham County, with plans to produce up to 150,000 cars annually once operational next year.
The company is also shifting its strategy towards dealerships, moving away from the initial direct-to-consumer model to accelerate vehicle rollout.
In terms of executive changes, VinFast recently underwent its fourth management reshuffle, with founder Pham Nhat Vuong replacing Thuy as CEO while she assumed the role of chairwoman of the board of directors. Thuy characterized the change as a “reinforcement” to facilitate global expansion plans.
VinFast is also making global strides with a $2 billion factory under construction in India, aiming for a global delivery of 750,000 cars per year by 2026. The VF3, already available in Vietnam, is set for a US launch “early next year.”
Despite focusing on smaller models like the VF3, VinFast remains committed to larger car models for the US market. In addition to the VF3, the company showcased an all-electric pickup truck in Las Vegas, aiming to gather public feedback for a potential release in 2026. Thuy expressed the company’s goal to cater to diverse consumer preferences, stating, “We want to have a little bit for everybody.”