Vietnamese automaker VinFast has recently announced a $200 reduction in monthly lease payment fees for its first electric vehicle customers in California. The discount applies to the lowest trims of its five-seater VF8 electric, which is now available for as low as $399 per month (with over $4,000 down).
The move reflects stiffening competition in the EV market as established manufacturers, including Tesla, have also been forced to cut prices. It also shows how VinFast continues to stumble in its long-shot leap into the U.S. market.
What is VinFast?
Founded in 2017, VinFast is a newcomer to the auto industry. This subsidiary of the Vietnamese conglomerate Vingroup has quickly pivoted to the EV segment and the international market. VinFast is driven by its ambitious Vietnamese owner billionaire Pham Nhat Vuong. Its vehicles, made in Vietnam, fuse Italian design with German and Austrian engineering. Company leadership features American management.
In 2019, just two years into its existence, VinFast announced plans to sell its vehicles in the United States and Canada. Now, just shy of its sixth anniversary, that has become a reality. And it even plans on building EVs in America. But VinFast’s road to the U.S. so far has been rocky.
VinFast’s Arrival or Crash Landing?
On March 1, VinFast delivered its first 45 EVs to customers — months later than originally planned and short of the 999 expected. The nearly four dozen vehicles were the City Edition of the VF8 — which features a lower battery range than the VF8 available for purchase.
VinFast’s initial vehicle roll-out in the U.S. was to consist of two models with two trims each: the five-seater, two-row VF8 and the seven-seater, three-row VF9. In November, it said it would expand its offerings in North America to include the smaller VF6 and VF7, though it’s unclear when these will be available on this side of the ocean.
What’s also unclear is when VinFast announced the VF8 City Edition. Its November press release on the export of the first 999 VF8s never referred to a “City Edition.” Axios reported in January that users on the VinFast official discussion board expressed disappointment over the “previously unannounced” City Edition and were looking to cancel their reservations. These posts no longer appear on the VinFast discussion board. Users on the board claim that negative posts have been deleted by moderators.
The City Edition of the VF8 features lower specs than the originally-announced VF8. The EPA-rated battery ranges for the City Edition’s two trims are just around 200 miles — roughly 30 percent less than the initially announced ranges for the original VF8’s trims.
VinFast has also abandoned its convoluted battery leasing program in North America. VinFast initially priced the VF8 as starting at just over $40,000. But that did not include ownership of the battery. Unlimited battery plans would be over $100 a month, adding thousands of dollars to the true cost of the vehicle over the period of ownership. The original VF8 now is now priced at $59,000, inclusive of the battery.
While some early reviews of the VF8 were positive, with Kelly Blue Book testing it and calling it “quick and quiet,” subsequent reviewers have described the car as slow and well short of “premium” quality.
What is VinFast’s Place in the Market?
VinFast gets headlines because it’s a novelty in the industry. It’s a new EV maker and a Vietnamese one at that. But while the company has branded itself as “premium within reach,” its vehicles aren’t cheap.
Its models are just as expensive as vehicles by established brands in the same class. Why buy the VF8 when you can buy an Audi Q4 e-tron for the same price? Or the VF9 when you can purchase the similarly-priced Mercedes EQB 350 or Tesla Model Y? It doesn’t look like VinFast’s smaller vehicles, the subcompact VF6 and compact VF7 SUVs, will be cheaper than Chevy’s growing lineup of electric SUVs: the Bolt, Blazer, and Equinox.
VinFast EVs, presently made in Vietnam, are ineligible for the new federal EV tax credits. That may change if VinFast starts building its vehicles in the U.S. But Reuters reports that VinFast’s North Carolina plant plans are now being pushed back to 2025. By then, the EV market will become even more crowded.
Given the long wait times for many of its competitors, drivers intent on switching to an EV may opt for a VinFast through lower-risk options like leasing or Autonomy’s rental service. That may give VinFast a chance to prove itself before a skeptical American market. But, right now, VinFast cars are neither “premium,” nor “within reach.”