VinFast Cuts Lease Prices For First U.S. Buyers, Recalls Over 2,700 Units

Vietnamese automaker, VinFast, has cut the lease price for the first model of electric vehicles shipped to the United States by over 50% for California customers. According to emails sent by the company to customers, they plan to start delivering the vehicles from March 1, 2023.

Earlier in January, VinFast had mentioned that the first VF8 all-electric crossovers will be available for lease for 24 months at the price of $599 a month. However, as of February 27, 2023, the price on the company’s website was adjusted to $399.

Also, for those that have already paid a refundable deposit on the vehicle, the company said the lease price will be $274 monthly in California. The new prices represent a 33% and 54% discount when compared to the price earlier advertised on the website.

“This is our special offer to VinFast customers for the VF8 City Edition models in order to stay competitive with other brands,” said a statement on the company’s website. “We will officially deliver the VF8 City Edition vehicles to customers on March 1.”

The move by VinFast is a sign that the EV price war started by Tesla in January is far from abating. Tesla cut EV prices by about 20% in January and multiple times in some regions. However, the company has since increased prices on some models.

VinFast is not one of the 39 EV makers that qualified for the IRS tax credit. Nevertheless, the Vietnamese automaker reached a deal with Autonomy, a vehicle subscription service, for the purchase of 2,500 EVs back in November 2022.

VinFast recalls over 2,700 cars because of bolt problems

VinFast has recalled 2,781 sports utility model VF8s it sold in its domestic market. The recall was to check and possibly replace the bolt connecting the front brake caliper to the knuckle. VinFast made the recall announcement on Saturday 18 February 2023.

“Due to a specific component assembly item, the bolt connecting the front caliper to the knuckle may loosen when the vehicle is in operation, potentially lowering the effectiveness of the front brake,” VinFast said in a statement.

Perhaps, this issue was the reason why the 999 VF8 vehicles shipped to the United States were held at the docks for several days. The company said the issues would be fixed immediately. The announcement of the cut in lease prices and the statement showing the company plans to start delivering the vehicles by 1 March is a sign that the issues may have been fixed.

“This is a relatively simple procedure that can be done quickly and will not affect the delivery timeline, which is expected to start by the end of February 2023,” the statement said.

In December the company delivered about 4,000 EVs to domestic customers. More than half of that number was the VF8 model. The Vietnamese automaker also secured 55,000 orders globally. Interestingly, 12,000 of those orders are headed for the U.S. market.

Inasmuch as VinFast was proactive in recalling the affected vehicles, it said it has not recorded any complaints or breakdowns from customers based on the loose bolt.

VinFast acquires permit to begin factory construction

On February 17, 2023, VinFast said North Carolina regulators had given the company an environmental permit that it requires to start construction on the planned $4 billion EV assembly plant in the United States.

VinFast has been making moves to expand to the United States where it plans to compete with heavyweights like Tesla. Although the Vietnamese company was granted the “Air Permit”, the company disclosed that they are still chasing other permits for the Chatham Country factory. Nevertheless, they will begin a tender for construction soon.

“The Air Permit allows us to start construction on phase 1 of the factory. We will start construction soon,” said the company without giving details on the timeframe.

VinFast disclosed plans to begin operation in the North Carolina plant as early as 2024. The factory is expected to create over 7,000 jobs. Phase one of the project will gulp $2 billion for the construction of a factory that will produce 150,000 vehicles annually. The focus of the second phase will be battery production.

Significant progress in the push for European expansion

In January 2023, VinFast was awarded a corporate Environmental, Social, and Governance (ESG) assessment score of 23.3 which puts it in the “medium risk category” as well as earned the 9th position in comparison to 70 other all-EV makers. This is the highest ESG rating of the lowest potential risk when compared to other companies that make all-electric vehicles.

ESG is a vital tool often considered by investors when looking for a company or product to throw in their money. Likewise, it is seen as a validation when purchasing stocks based on their environmental impact, social responsibility, and corporate governance practices.

It is highly valuable in the European Union which spearheads the promotion and implementation of different information, safety, and privacy standards and practices. Sustainalytics makes its assessment based on seven key ESG categories.

This includes corporate governance, human rights – supply chain, carbon-own operations, business ethics, product governance, human capital, and carbon – product and services.

In addition to that, VinFast has announced that its first service centers and stores in the Netherlands, France, and Germany will be fitted with AC and DC charging stations from E.ON Drive. The rollout of the internal charging points for VinFast’s service centers as well as public charging stations across the three countries will be stepwise.

The first phase will see the installation of about 200 AC and DC (150 kW) charging points with customized infrastructure for public and private charging access. VinFast is planning the delivery of its first batch of cars in Europe by mid-2023.

“We look forward to supporting VinFast as a promising player in the fast-growing EV market as it enters and builds up in Europe,” said Mathias Wiecher, CCO of E.ON Drive. “With the E.ON Drive charging solutions, we are making it radically simple for customers to drive and charge, starting from the first point of contact at VinFast locations.”

VinFast has plans to open 50 stores n Amsterdam, Oberhausen, Munich, Frankfurt, Berlin, Cologne, and Paris. Only 13 of that number have been opened so far. Nevertheless, the service and retail network will continue to expand across Europe this year.