VinFast, a Vietnamese electric vehicle (EV) manufacturer, is striving to enter the US market. However, the company is facing tough competition and a decline in EV demand, which has made it challenging for the company to establish itself in the market.
To combat these challenges, VinFast has opted to reduce the monthly lease prices for its first US buyers. The initial price of $599 per month has been reduced to $399 per month. This move comes in response to American rivals such as Tesla slashing their prices to entice more customers to purchase their vehicles. Despite these challenges, VinFast’s CEO, Le Thi Thu Thuy, remains optimistic and positive about the long-term demand for EVs.
She stated in a recent interview on CNBC’s “Squawk Box Asia” that the whole world is transitioning from internal combustion engines to EVs. She believes this trend presents an opportunity for numerous players to enter the market to fulfill the growing demand for EVs. She also highlighted VinFast’s clear approach and commitment to quality and accessibility while maintaining cybersecurity and functional safety.
However, VinFast has faced some issues with software which caused delays in delivering its first batch of cars to US buyers. From the 999 EVs that the company was supposed to deliver in December 2022, only 45 SUVs arrived by March of 2023, causing disappointment to their clients. Additionally, VinFast’s cars are currently ineligible for the $7,500 tax credit in the US because they are not manufactured in the US but are instead made in Vietnam. This will impact VinFast’s sales in the US, though there are plans to start manufacturing plants in North Carolina, which would qualify their electric cars for tax credits. Currently, VinFast is in the final stages of obtaining permits for their production plant in North Carolina, with plans to begin production in 2024.
Although VinFast filed for an initial public offering (IPO) in December, the company hasn’t launched its roadshow. The company’s focus is not solely on raising money, but also expanding internationally for corporate purposes. VinFast’s CEO acknowledged that the market situation is challenging, which has made it harder for the company to achieve its objectives.
In conclusion, VinFast’s CEO remains confident in the company’s long-term prospects. She believes that the shift towards EVs presents a unique opportunity for numerous players to carve out their niche in the market. VinFast faces multiple challenges ahead concerning its software and tax credit eligibility, but its plans to start manufacturing plants in the US shows the company’s commitment to breaking into the EV market.
