Vietnamese electric car maker VinFast (VFS) had great success with its public debut in the United States last year. Its stock rose 255% on its first day on the Nasdaq, after completing its SPAC merger with Black Space Acquisition, surpassing the market caps of Ford (F) and General Motors (GM).
But it has been a sharp decline since then. The stock price fell by almost 90%, and the VF8, its first global car, received very poor reviews.
VinFast hopes to bring the car back to life with a $20,000 vehicle unveiled at CES in Las Vegas. With an estimated driving range of 125 miles on a full charge and measuring just 125 inches long, the VF3 will be one of the smallest vehicles in the U.S. market.
It's one that Le Thi Thu Thuy, VinFast's CEO, said the company never intended to bring to North America.
“It's an interesting development,” Thuy said, explaining why VinFast chose its larger VF8 as its flagship car in 2023. “All the market research said that American consumers really like big cars.”
But when Thuy visited the United States to meet dealers in September and showed off the smaller VF3 model, she said they urged her to compete at the lower end of the market.
“Everyone said, ‘Sure, it will be the biggest size for us,’” Thuy said. “So we went back and decided to develop the VF3 for the American market as well.”
The shift in strategy highlights the challenges Southeast Asian startups face in penetrating the increasingly crowded electric vehicle market. The company began delivering cars in California last March and has sold nearly 21,200 units as of the third quarter of 2023. By comparison, Tesla (TSLA) delivered more than 435,000 cars in the third quarter alone.
VinFast's price, which ranges from $47,000 to $53,000, has proven a tough sell at a time when American consumers are becoming more cautious about going electric.
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Electric vehicle sales surpassed a record 1.2 million vehicles in 2023, according to Kelley Blue Book, but the rate of sales growth has slowed compared to the same period a year earlier. In a Yahoo Finance-Ipsos poll last fall, drivers listed range, cost and infrastructure as top reasons for delaying the purchase of electric vehicles.
“Now you have to sell your products to the mass market,” Thuy said. “You just have to make sure that the vehicles are affordable and can also meet the daily needs of the consumer.”
To meet this demand, VinFast is building a $4 billion electric vehicle factory in Chatham County, North Carolina, where the company aims to produce up to 150,000 vehicles annually once it is completed next year. It has also turned to dealerships to speed up the rollout of its cars, abandoning an earlier plan to rely solely on a direct-to-consumer model.
The company also underwent a fourth executive change this week. Pham Nhat Phung, founder of parent company Vingroup, stepped in to replace Thuy as CEO while she was appointed chair of the board. Thuy described the move as a “boost” that would position the company for global expansion.
In addition to the US facility, VinFast is building a $2 billion factory in India, with a goal of delivering 750,000 vehicles annually globally by 2026.
The VF3, which is already sold in Vietnam, is scheduled to be launched in the United States “early next year,” Thuy said. But the company is not giving up on its larger automotive ambitions in the market.
In addition to the VF3, VinFast unveiled an all-electric pickup truck in Las Vegas. While the car remains just a concept, Thuy said the company hopes to get feedback from the public for a possible release in 2026.
“We want to have a little bit for everyone,” she said.
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Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @Akiko Fujita.
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