VinFast, the Vietnamese electric vehicle (EV) manufacturer, recently announced the opening of its first dealership in the United States. As we all know, this strategic move aligns with the ongoing construction of VinFast’s massive $4 billion EV factory in North Carolina.
In an effort to speeds up its entry into the US market, VinFast has forged a joint partnership with North Carolina’s Leith Automotive Group. This collaboration aims to introduce VinFast’s fully electric cars to American consumers, with the VF 8 crossover being the flagship model to debut. The dealership, aptly named Leith VinFast, is set to operate from Cary Auto Park in Cary, North Carolina, strategically positioned in proximity to VinFast’s EV manufacturing facility in Chatham County.
VinFast is undergoing a notable shift in its distribution strategy, transitioning from its prior direct-to-consumer model, influenced by Tesla, to what it terms a “hybrid” approach. This new model incorporates collaboration with dealerships, offering a comprehensive experience for customers. Leith VinFast, aside from sales, will provide services like repairs, maintenance, and parts for VinFast vehicles, marking a departure from the more straightforward distribution models adopted by some of its competitors.
Looking ahead, VinFast’s manufacturing plant in North Carolina is anticipated to reach an impressive annual production capacity of up to 150,000 vehicles once it achieves full operational status in 2025. This ambitious manufacturing endeavor underscores VinFast’s aspirations to become a significant player in the global automotive market.
Having commenced vehicle deliveries in California since March, VinFast is already making its presence felt in the US market. The company has received 70 dealership applications across the country, indicating a potential distribution network of 125 points of sales, subject to regulatory approvals.
VinFast is not limiting its offerings to the VF 8 crossover; the company is exploring the introduction of additional models in the US market. Among these is the VF 3 electric minicar, which comes with a price tag of $20,000 and has recently been launched in VinFast’s home country. Alongside this, VinFast is considering bringing the high-end VF 9 to the US, expanding its product portfolio.
VinFast’s VF 8 crossover, priced between approximately $47,000 and $53,000 depending on trim and options, offers a noteworthy range of 264 miles per charge. Positioned as an underdog in the electric vehicle landscape, VinFast faces pricing pressure from established giants like Tesla. Despite their global ambitions, VinFast’s sales volumes have been comparatively modest, with around 11,315 vehicles sold in the first half of 2023, in stark contrast to Tesla’s over 889,000 vehicles during the same period.
VinFast is looking to broaden its footprint not only in North America but also in Europe. The company has set an ambitious target of selling 750,000 vehicles annually globally by 2026. To differentiate itself from established brands, VinFast is strategically adopting various approaches.
One key differentiator is affordability. VinFast’s initial offerings, including the VF 8 crossover, are priced slightly below comparable Tesla models, making them an attractive option for budget-conscious consumers. Furthermore, VinFast is exploring a subscription model, providing flexible plans that allow customers to circumvent the hefty upfront costs associated with vehicle ownership. This approach could particularly resonate with younger, tech-savvy demographics who prioritize flexibility and accessibility over traditional car ownership.
VinFast is also placing emphasis on technology and design. Collaborations with cutting-edge tech companies such as Bosch and Magna Steyr ensure that VinFast vehicles are equipped with the latest innovations. The sleek Italian-inspired design, especially evident in the VF 9 SUV, provides a distinct aesthetic compared to the more angular silhouettes of many competitors.
Additionally, VinFast’s focus on vertical integration, controlling much of its supply chain from battery production to manufacturing, holds the potential for cost optimization and quicker production cycles. This, in turn, could provide VinFast with a competitive edge in terms of efficiency and responsiveness to market fluctuations.
Its unique features and advantages further contribute to its competitive positioning. The company offers innovative battery leasing options, separating the battery cost from the vehicle purchase to reduce upfront expenses. VinFast vehicles are equipped with over-the-air (OTA) software update capabilities, allowing for continuous improvement and new feature additions throughout their ownership life. Moreover, VinFast aims to integrate its vehicles into smart home ecosystems, creating a seamless connected experience for users.
As VinFast accelerates its presence in North America and Europe, the company faces the challenge of carving a niche for itself in a highly competitive market. However, with a strategic focus on affordability, innovative distribution models, cutting-edge technology, and unique design elements, VinFast is poised to make a lasting impact and offer consumers a compelling alternative to established brands in the electric vehicle landscape.
