VinFast’s Entry into the Competitive US Market against Tesla

The Wall Street Journal, a leading US economic and financial newspaper, recently commented on the strategy and prospects of Vietnamese car manufacturer VinFast. The newspaper also recognized the effectiveness of the economic strategy implemented by US President Joe Biden.

“Newcomer” receives warm welcome from US government

VinFast has caught the attention of North Carolina, as the company is actively seeking a location to establish a manufacturing plant in the US. State officials have been striving for several years to attract an automaker to Chatham County, and their efforts paid off when they successfully convinced VinFast, a young Vietnamese startup, to invest in the US, despite facing tough competition from more established car manufacturers.

VinFast groundbreaking ceremony for its plant in North Carolina, USA in July

VinFast, a newly established electric car company, has made remarkable progress in just 6 years. The company has been able to introduce modernly designed cars by collaborating with industry giants such as BMW, leading Italian designers, and by successfully recruiting top talents in the industry. VinFast is now considered a strong competitor to Tesla and other major American car companies in the domestic market.

The governor of North Carolina, Roy Cooper, expressed his government’s appreciation for VinFast’s decision to establish a manufacturing plant in the state. He emphasized that this is the largest economic development project in North Carolina’s history. US President Joe Biden also recognized the effectiveness of his economic strategy through VinFast’s investment.

VinFast’s bold decision to list on the Nasdaq stock exchange, along with the company’s ambitious plans, has attracted significant attention. Earlier this year, VinFast’s stock price soared, surpassing the total market capitalization of Ford and GM combined.

With a large car manufacturing plant currently operating in Vietnam, VinFast has already sold about 10,000 electric cars globally in the first 6 months of this year. The company acknowledges that it had to make substantial investments as a newcomer in the auto industry.

The support VinFast has received is evidence of the US government’s commitment to promoting domestic production using clean energy technology. The US government has allocated billions of dollars to support electric car manufacturers, solar energy, and mineral processing. In addition to federal support, state and local governments are also providing financial incentives for these activities.

While VinFast has not received federal loans, the company is benefiting from various incentives offered by states and counties. These incentives include subsidy payments and hundreds of millions of dollars in state funds allocated to improve roads and infrastructure near VinFast’s new factory location.

Governor Cooper, in an interview with The Wall Street Journal, expressed his confidence in VinFast’s commitment. With an electric car factory now in Chatham County, North Carolina has become the epicenter of the clean energy economy.

VinFast listed on the Nasdaq (USA) since August this year

VinFast’s Global CEO, Le Thi Thu Thuy, stated that the company is confident in capturing attention in key markets. According to her, the US market appreciates brands that have grown from scratch and have the capacity to compete with established players.

One advantage of VinFast’s expansion in the North American market is that the company is not from China. While well-known Chinese electric vehicle brands like BYD are expanding globally, most of them have yet to penetrate the US market due to high import duties and escalating US-China tensions.

In the US, VinFast enjoys support from lawmakers from both parties. Additionally, Vietnam is considered a friendly trading partner by the US.

Long-term commitment to the US market

VinGroup founder, billionaire Pham Nhat Vuong, has ambitious plans to build Vietnam’s first global brand, which is reflected in his heavy investments in VinFast. Mr. Vuong, who is Chairman of Vingroup and is rated by Forbes as the richest person in Vietnam, holds over 98% of VinFast’s shares.

Vingroup has made significant investments to acquire expertise and foreign technology. VinFast’s first CEO, Jim DeLuca, had a 37-year career at General Motors, where he served as Vice President of Global Manufacturing Operations.

The company has successfully completed the construction of a factory and developed three car models in just 21 months, much faster than traditional automakers. However, since last year, VinFast has ceased production of internal combustion engine cars and shifted its focus to electric vehicles.

VinFast cars being exported to the US for the first time

VinFast’s cars are currently manufactured at a highly automated complex in Hai Phong, Vietnam. Many components are produced in-house, and the factory relies heavily on robotic technology for various tasks, such as welding car parts together. This approach allows VinFast to minimize labor costs compared to its competitors.

VinFast also highlighted that its electric vehicles have a price advantage in export markets, thanks to free trade agreements between Vietnam and regions like the European Union. VinFast is currently selling cars in the US, Canada, Vietnam, and has plans to enter the EU market soon.

VinFast’s factory has a capacity to produce up to 300,000 electric cars per year, but the company plans to manufacture only 40,000-50,000 cars this year. A major partner of VinFast is the transportation company GSM, which plays a crucial role in promoting electric cars in the Vietnamese market.

“Our goal is to have VinFast electric cars on the streets of Hanoi as quickly, extensively, and impressively as possible,” affirmed David Mansfield, VinFast’s CFO.

The construction of VinFast’s factory in North Carolina began in July, with the production of electric cars expected to start in 2025. The factory in the US will be similar to the one in Vietnam, with a high level of automation and a well-developed supplier network in the surrounding area to ensure flexibility. Customers who purchase VinFast cars produced in the US may be eligible for a $7,500 electric vehicle tax incentive.

In the US market, VinFast positions itself as a premium brand. The VF 8 City Edition starts at nearly $50,000. The company has already opened 13 showrooms in California and plans to open 3 more locations.

“If we want to integrate into the US economy and demonstrate VinFast’s long-term commitment to this market, we must make substantial investments,” said Ms. Thuy.

TH (Tuoitrethudo)

Source: The Wall Street Journal