Vietnamese electric vehicle (EV) manufacturer VinFast, with ambitions to compete globally, especially with Tesla, is grappling with challenges in securing a substantial share of the domestic market.
Backed by Vingroup, Vietnam’s largest conglomerate, VinFast holds strong brand recognition within the country. Nevertheless, it has encountered difficulty in convincing local consumers of the reliability and quality of its EVs.
For example, Ngo Trong Tu, a 31-year-old entrepreneur from Hanoi, contemplated purchasing a $35,000 VinFast EV but ultimately opted to spend nearly $5,000 more on an imported gasoline-powered Honda due to concerns over perceived safety and quality issues associated with VinFast’s EVs, as well as negative feedback on social media.
In 2022, despite approximately 280,000 new passenger vehicles being sold in Vietnam, VinFast managed to sell only 7,400 units. In the first half of 2023, the company achieved 11,000 purchases, but over half of these were acquired by a taxi firm owned by its parent company, Vingroup.
In addition to consumer skepticism, VinFast has faced criticism regarding construction quality and car software issues, compounding the challenges of promoting EVs in a country with limited charging infrastructure. Reports of problems with VinFast’s EVs, including battery malfunctions, smart key issues, virtual assistant glitches, accelerator problems, and even a vehicle fire, have surfaced.
VinFast asserted that the fire incident was not caused by a fault in their vehicle, as determined by authorities. VinFast’s CEO, Le Thi Thu Thuy, acknowledged the doubts and emphasized the company’s commitment to continuous improvement.
VinFast’s Ambitious Global Goals VinFast asserted that they promptly address complaints reported to their service center, and after several software updates and enhancements, their EVs are performing well.
VinFast is owned by Vietnam’s wealthiest individual, Pham Nhat Vuong, who is focusing on the growing global EV market. Despite fluctuations in VinFast’s shares since its Nasdaq debut in August, with a market value surpassing auto giants like Ford and General Motors before declining, the company continues to grow. It reported a net loss of over $600 million in the third quarter but aims to deliver up to 50,000 cars globally this year, having sold approximately 21,000 units thus far.
While Vingroup has the financial capacity to endure such losses for now, experts suggest that a viable long-term plan is needed. Despite Vingroup pioneering EV infrastructure in Vietnam, not all experts trust VinFast’s offerings, and there’s a perception that Vietnamese consumers place more faith in foreign brands over national pride when it comes to buying expensive cars.
