Vietnamese EV maker VinFast is facing its first market challenge as it begins distributing vehicles in North America: competition lowering prices.
Tesla’s recent decision to dramatically reduce prices left the newcomer brand out on a limb with its pricing. The new VinFast VF 8 midsize five-passenger crossover closely tracks the Tesla Model Y. The VF 8 has a starting price of $59,000, compared to the newly reduced price of the Model Y at $52,990.
The seven-passenger VF 9 starts at $83,000, and while it is closer in size to the Rivian R1S, it’s also expected to compete with the five-passenger Tesla Model X. VinFast remains lower than the Tesla price by a large margin, starting at $83,000 vs. the Tesla’s $109,990, but comes in above the Rivian’s $78,000 starting price tag.
According to a report on Reuters, VinFast is considering promotions to maintain its competitive posture versus Tesla. “We are considering many promotion programs and will announce soon,” said an unnamed company spokesperson in the report. No specifics of the promotions were described.
VinFast has shipped about 999 examples of the VF 8 to America, and is set to begin deliveries this month. The company hopes to have some of the larger VF 9 SUVs available for sale in the U.S. by mid-year, ahead of its earlier plan. Two other products, the downsized VinFast VF 6 and VF 7 models, could be here before the end of 2023, Vingroup Vice Chair and VinFast Global CEO Le Thi Thu Thuy confirmed. VinFast has announced orders will be open for the VF 6 and VF 7 in March 2023.
“We’re transitioning from vehicle reveals to vehicles on the road,” said Stuart Taylor, VinFast’s director of smart services, said during a presentation at CES 2023.
Made in America
VinFast has great expectations for the North American market and around the world. The company reported nearly 65,000 pre-orders for its vehicles and has plans to ramp up production to 750,000 EVs per year by model year 2026. To serve the American market and qualify for U.S. tax credits, VinFast is building a North Carolina factory to build vehicles in the United States.
VinFast’s factory will create a major manufacturing center in Chatham County’s Triangle Innovation Point megasite, covering an area of 800-hectares, with 3 main areas: electric cars and buses production and assembly, EV batteries production, and ancillary industries for suppliers.
VinFast’s North American production is expected to start in July 2024. The capacity of phase 1 is expected to be 150,000 vehicles per year. According to the agreement with North Carolina, VinFast will continue to invest in this factory in future phases. Vehicles to be produced at the site include the VinFast VF 8 and VF 9.
“North Carolina’s strong commitments in building a clean energy economy, fighting climate change and reducing greenhouse gas emissions in transportation make it an ideal location for VinFast to develop its premium, smart and environmentally friendly EVs,” said Thuy.
“Having a production facility right in the market will help VinFast to proactively manage its supply chain, maintain stabilized prices and shorten product supply time, making VinFast’s EVs more accessible to customers, contributing to the realization of local environmental improvement goals.”