A recent report by Vndirect assesses that the US electric vehicle market holds significant potential but is currently experiencing heightened competition, posing a challenge for VinFast.
46% OF US ELECTRIC VEHICLE OWNERS CONSIDER SWITCHING TO INTERNAL COMBUSTION ENGINE VEHICLES
According to Cox Automotive, battery electric vehicle (BEV) sales only grew by 2.9% year-over-year in Q2/24. Similarly, Q1/24 sales increased by just 2.6% year-over-year, following 13 consecutive quarters of double-digit growth.
McKinsey’s 2024 Global Automotive Consumer Survey revealed that 46% of US electric vehicle owners consider switching back to internal combustion engine (ICE) vehicles (compared to 29% globally).
Key concerns among US consumers include the lack of charging stations, the overall cost of ownership, and the inconvenience of long-distance travel with electric vehicles.
Despite these challenges, VinFast is forging ahead with its plans in the US market.
The company aims to open 18 dealerships in Q2/24 and, with approximately 80 valid dealer applications, will continue to expand its sales network throughout the year. VinFast is expected to commence deliveries of the VF9 model in the US market in Q2-3, followed by the VF7 in Q3-4.
To accelerate sales, the company has adjusted its distribution model and policies, combining company-owned showrooms with third-party dealerships.
While this change enables VinFast to expand rapidly nationwide, it also results in a slight reduction in gross profit margins.
The dealership model also optimizes capital efficiency and expansion costs by leveraging the network and local consumer insights of its dealers.
VinFast also offers leasing options, as most Americans prefer to lease vehicles initially and then purchase them. The company has partnered with US Bank as its preferred partner for leasing and retail financing.
VinFast has also established relationships with other partners, including Bank of America, JPMorgan Chase, Allied First Bank, and Westlake Financial.
VinFast has delayed the operational launch of its North Carolina factory until 2028. Initially scheduled for July 2024, the timeline was later adjusted to 2025 before the recent change.
Vndirect estimates that this delay will save VinFast $1.4 billion, which can be allocated towards establishing factories in Asian markets.
FOCUSING ON SOUTHEAST ASIA AND INDIA
Vndirect believes that the domestic market will remain a stronghold for VinFast, as car ownership rates in Vietnam have consistently grown in recent years, coupled with a rising middle class and increasing environmental awareness. Additionally, the cost benefits of electric vehicles, such as lower maintenance and fuel costs, are expected to drive electric vehicle adoption.
VinFast is currently targeting Southeast Asia and India as key markets due to favorable policies and growing consumer preference for electric vehicles. Vndirect forecasts that these regions will account for 89-90% of the company’s vehicle sales during 2024-2026.
Vndirect predicts that VinFast will deliver approximately 80,100 electric vehicles (EVs) and 88,900 electric scooters (E-scooters) in 2024, followed by 114,600 EVs and 100,000 E-scooters in 2025.
The company’s revenue is estimated to reach VND 63,485 billion in 2024 and VND 101,950 billion in 2025, reflecting year-over-year increases of 121% and 60.6%, respectively. Gross losses of VND 7,626 billion are expected in 2024, with a transition to gross profits of VND 8,206 billion forecasted for 2025.
VinFast currently operates a factory in Hai Phong with a designed capacity of 300,000 units per year. The company is also constructing a CKD factory in Tamil Nadu, India, with a capacity of 50,000 units per year, and another CKD factory in Indonesia with the same capacity. Additionally, VinFast plans to build a factory in North Carolina, USA, with a capacity of 150,000 units per year (phase 1).
As of June 2024, VinFast has established a distribution network comprising 130 showrooms (including company-owned and dealer showrooms) and access to 950,000 charging ports globally (including company-owned ports in Vietnam and partner networks in North America and Europe).
Largest taxi company in Nghệ An cancels car purchase contract with Toyota to switch to VinFast
Mr. Ho Chuong, CEO of Son Nam International Transport Co., has recently disclosed that he had previously signed contracts to purchase gasoline-powered vehicles from a Japanese car manufacturer. However, he has since diversified his investment portfolio by also venturing into VinFast electric vehicles, in order to embrace long-term and sustainable development.
VinFast’s journey to realizing the dream of Vietnamese businesses conquering the international market
After a stunning victory in the “Event of the Year” category at the WeChoice Awards 2023, VinFast’s pioneering event listed on the US stock exchange has inspired many Vietnamese businesses and young people.
VinFast slashes rental prices for VF 8 in the US.
VinFast’s recent price adjustment has made the VF 8 one of the most affordable new car models available for lease in the US market.
The European automotive industry struggles to defend against a formidable rival from over 7000km away.
The automotive industry just welcomed new car models from a formidable competitor.
VinFast’s Success Leads the Way for Vietnamese Businesses to Conquer the Global Market
VinFast’s listing on the US stock exchange not only provides an opportunity for the company, but also inspires a strong sense of empowerment among young Vietnamese entrepreneurs. It affirms that dreams and ambitious visions are not bound by geographical limitations.
