Vietnamese EV maker VinFast faces difficulties with low sales in the U.S. market, as only 128 vehicles have been registered between January and May 2023.
VinFast’s initial foray into the U.S. EV market sees poor sales, with just 128 registrations of its VF 8 crossover in five months.
Despite efforts to boost sales, the automaker struggles with competition from better-known brands, higher prices, and lack of federal tax incentives.
VinFast’s plans for a U.S. stock listing face setbacks, with shareholders of the prospective merger partner, Black Spade Acquisition, redeeming over 80% of their shares.
VinFast, the Vietnamese electric vehicle manufacturer, has encountered significant difficulties in penetrating the American market and securing a U.S. stock listing to help fund its global expansion. According to Experian data, the EV start-up had a meager 128 new-vehicle registrations for its VF 8 crossover between January and May, suggesting the company is failing to entice American consumers. While VinFast has attempted to stimulate sales by slashing prices and offering lease deals, it faces stiff competition in a market dominated by household names such as Ford, Volkswagen, and Tesla.
Part of VinFast’s struggle can be attributed to its unfamiliarity in the U.S. and a pricing strategy that places the VF 8 above similar vehicles from its competitors. The VF 8, which starts at $47,200, is not eligible for the federal tax incentive of up to $7,500 due to being manufactured outside of North America, giving an edge to competitors like Tesla whose Model Y is both cheaper and tax incentive-eligible. Critics have also described the VF 8 as a rushed product, which may further deter potential buyers.
Apart from the issues in the consumer market, VinFast’s plans for a U.S. listing to raise funds for expansion have hit snags. The company planned to go public by merging with Black Spade Acquisition, a special purpose acquisition company (SPAC). However, Black Spade Acquisition’s shareholders have redeemed over 80% of their shares, casting doubt on VinFast’s plans. Despite this setback, VinFast insists that this development will not impact the listing process or agreed valuation.
VinFast’s plans to expand its EV lineup and its ambition to break into larger markets in North America, Europe, and Asia seem to hang in the balance as the company grapples with these challenges. It had to postpone the construction of a $4 billion plant in North Carolina to 2025, delaying its production capabilities in the U.S. Additionally, the company reported a $598 million loss in the first quarter amidst a 49% drop in revenue. These hurdles may impact VinFast’s growth trajectory and its goal to establish a significant presence in the global EV market.