Vietnamese EV maker rapidly expanding network in the US. Experts say don't sleep on this

VinFast entered the U.S. market last March with deliveries of 45 VF8 City Edition all-electric SUVs through nine storefronts in California. The company, after deciding to use the dealership route to reach consumers, has signed on six dealers in five states: New York, Texas, Kansas, Florida and North Carolina, and has 13 California retail stores.

Expanding in the United States through auto dealerships was not VinFast’s first choice. The company, according to Sam Abuelsamid, principal e-mobility analyst at market research firm Guidehouse Inc., had previously wanted to use a direct sales model similar to Tesla Inc.'s.

Expanding through dealerships is considered a lower-risk, more old-fashioned approach for VinFast. It provides a crucial network for vehicle maintenance. When VinFast cars need service, customers will be able to return to the dealerships for help.

VinFast last month reported a net loss of $2.4 billion in 2023 — 14.7% larger than in 2022 — and $167.7 million in cash and cash equivalents. A subsidiary of Vingroup, VinFast is backed by Vietnam billionaire Pham Nhat Vuong, who founded the EV automaker in 2017 and was named CEO in January in place of Le Thi Thu Thuy.

Thuy, now chair of VinFast's board, told Reuters after the automaker's earnings report last month that fewer than 1,000 units were sold in North America last year, but the company expects the new dealerships to boost sales this year.

Thuy told investors on the automaker's February earnings call that the "dealer model starting in the U.S. has quickly proven itself, with recent sales improving ... we plan to do the same for Canada and many other markets."

In January, VinFast said it delivered 13,513 electric vehicles worldwide in the fourth quarter, a 35% increase over the previous quarter. It sold 42,291 EVs globally between its launch in 2021 through the end of 2023. That includes 34,855 EVs sold in 2023, which was below the automaker's forecast of between 40,000 and 50,000.

Tran Mai Hoa, VinFast’s deputy CEO of sales and marketing, said in a statement when the company released its delivery totals that "amid economic headwinds, slow EV adoption rate in certain regions has adversely affected deliveries plan.”

The company, which provided statements to questions and did not make itself available beyond that, is aiming for 100,000 sales by the end of 2024. It plans to use dealerships like North Carolina's Leith Automotive Group to help it get there. Adding VinFast gives Leith 27 rooftops in the Raleigh market, Leith COO Danny Williams said in an interview.

"The company itself is very impressive," Williams said. "They do have cash; they're not like one of these startups that is hoping to make it. And they're building the first-ever manufacturing plant for automotive in North Carolina, which is going to be about 35 minutes from where our store's at."

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