VinFast, a Vietnamese EV manufacturer, has announced the opening of its first dealership in San Diego, California.

The dealership will begin operations this month.

This marks a change from the company’s previous direct-to-customer sales model in the US.

The company, backed by Vingroup, has faced several challenges. These include competition, decreased demand, and the effects of US tariffs.

In addition to the San Diego location, VinFast is assessing opportunities for more dealerships throughout California.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ VinFast’s strategic pivot from direct sales to dealerships reflects EV market reality

VinFast’s switch to a dealership model marks a significant departure from its initial Tesla-inspired direct-to-customer approach that was central to its American market entry strategy1.

This pivot illustrates how even well-funded new entrants must adapt their distribution strategies when facing market resistance, with the San Diego dealership being just the first in a planned California expansion1.

The shift mirrors challenges faced by other EV manufacturers who discovered that the direct sales model, while theoretically more efficient, often struggles to deliver the customer education and service experience needed for new brands without Tesla’s established reputation.

The dealership approach gives VinFast a physical presence that could help overcome consumer hesitation about purchasing vehicles from an unfamiliar Vietnamese brand competing against established players in the premium EV segment.

This strategic adaptation comes as the broader EV market faces headwinds, with tariffs potentially raising prices across the industry and growth projections being adjusted downward for 20252.

2️⃣ Vingroup’s massive financial commitment powers VinFast’s international ambitions

Behind VinFast’s rapid development stands Vingroup, Vietnam’s largest private enterprise, which has injected $942.6 million into the automotive venture, complemented by a personal contribution of $286.9 million from chairman Pham Nhat Vuong3.

This substantial financial backing, totaling $1.23 billion, enabled VinFast’s remarkably fast development timeline, going from concept to production in just over two years, and building a 335-hectare manufacturing facility in Hai Phong, Vietnam45.

The automotive push represents Vingroup’s ambitious effort to establish Vietnam as a global manufacturing player, with Pham Nhat Vuong leveraging his success from earlier ventures (including selling a noodle company for $150 million) to fund this national champion6.

VinFast’s premium positioning, starting with upscale models rather than budget vehicles, reflects Vingroup’s strategy of targeting affluent consumers and establishing a quality reputation before pursuing mass-market segments5.

Despite the significant investment, VinFast continues to face financial challenges, reporting a gross loss of VND 2.47 trillion ($102.4 million) in Q3 even as deliveries increased, highlighting the tremendous capital requirements of establishing a new automotive brand globally3.

3️⃣ VinFast’s competitive positioning offers value proposition against Tesla

VinFast has strategically positioned its vehicles to compete directly with Tesla on specifications while offering potential value advantages, as seen with the VF9 SUV which starts at $71,000 compared to the higher-priced Tesla Model X7.

The company emphasizes consumer-friendly features like its industry-leading 10-year unlimited-mile battery warranty, which exceeds Tesla’s 8-year, 150,000-mile coverage, addressing a key concern for EV buyers regarding long-term reliability7.

VinFast’s VF9 delivers competitive range specifications of 291-330 miles (depending on trim) and includes family-friendly features like an expansive 15.6-inch infotainment screen and Sony RIDEVU for content streaming7.

While Tesla maintains performance advantages (the Model X Plaid reaches 0-60mph in 2.5 seconds versus the VF9’s 6.5 seconds), VinFast’s approach emphasizes practical luxury and value rather than maximum performance metrics7.

This positioning reflects VinFast’s understanding that to compete as a newcomer, it must offer compelling practical advantages rather than trying to beat Tesla at its own performance-focused game, particularly as it works to establish brand recognition in the challenging U.S. market.

Recent VinFast developments

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