Shoppers walk past a VinFast’s flagship US store, as the Vietnamese electric vehicle is set to open its first overseas stores starting in California, in Santa Monica, the United States, July 2, 2022. (Photo: Reuters)
VinFast, an electric carmaker backed by Vietnam’s richest man, opened six showrooms in California on Thursday as the newcomer tries to muscle into a United States market dominated by Tesla Inc.
The showrooms are VinFast’s first outside of Vietnam. It plans to eventually open more than 30 in the state and elsewhere to sell directly to American consumers. US deliveries are due to start in the fourth quarter, Chief Customer Officer Craig Westbrook said in an interview at a new showroom in Santa Monica, just around the corner from a Tesla store in the same mall a few blocks from the beach.
Two VinFast electric vehicle (EV) models will initially be available for reservation at US stores: the VF 8, a mid-size SUV that starts at $40,700, and the VF 9 SUV, priced from US$55,500. The cars were on display Thursday in the atrium of the Santa Monica mall and the showroom there, which is less than half of the size of Tesla’s. The event attracted a crowd of shoppers, and Korean-American K-pop star AleXa performed on stage.
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“We want to make EV ownership for everybody as possible as we can,” said Westbrook, a former BMW executive. “Our position in the market will be largely defined by accessibility. I don’t see most other EV brands doing that.”
VinFast, a unit of conglomerate Vingroup JSC, was founded by billionaire Pham Nhat Vuong in 2017 and started making gas-powered cars in 2019. The company, which says it has about 73,000 reservations for its EVs globally, has a factory in Hai Phong in northern Vietnam and is the country’s only homegrown carmaker. It sold more than 65,000 gas-powered cars in 2020 and 2021.
VinFast has an ambitious target to deliver as many as 1 million cars globally in five to six years, a feat that would leapfrog more established manufacturers. Chinese EV startup Nio Inc. took about three years before rolling the 100,000th vehicle off its production lines. Goldman Sachs Group Inc. estimates that Tesla will produce 1.4 million cars this year.
Intense competition will be a challenge for VinFast in the US, especially as it is a foreign automaker, said Michael Dunne, chief executive officer of automotive consultant ZoZo Go LLC, which specialises in the Asian market.
“There’s no low-hanging fruit for VinFast to come in and take advantage of,” he said. “They have to convince the American consumer that they want a VinFast instead of everything else out there.”
VinFast said this week it has signed agreements with banks to raise at least $4 billion to help its US expansion. The company also said it secured about $1.2 billion in incentives from North Carolina for its planned EV factory in the state, where it intends to start production in 2024. Initial annual capacity there will be 150,000 EVs, according to the company. Before the plant comes online, VinFast will import its cars made in Vietnam to meet demand, Westbrook said.
The company, which has set up a US headquarters in Los Angeles and a research and development center in San Francisco, has said it plans to also start delivering cars in Canada, France, Germany and the Netherlands in late 2022.
Keyword: VinFast opens first EV showrooms on Tesla’s California doorstep