High turnover, media missteps, and an incomplete car: Inside VinFast’s rocky US launch

Last May, the new Vietnamese carmaker VinFast invited several dozen auto journalists to the coastal city of Encinitas, California, to test drive its VF8, a five-seat electric SUV that marked the company’s arrival in the United States.

For a few reasons, the “VinFast VF8 Media Launch Event” was peculiar, reporters in attendance recall. First, the car wasn’t ready.

“VinFast put out an unfinished product that was not fully functional,” Scott Evans, an editor at MotorTrend, told The News & Observer. In his review, Evans cautioned “the whole car shudders violently” when put in reverse.

“I was hoping it would be good,” said Ezra Dyer, a senior editor for Car and Driver who lives in Southern Pines. Dyer’s review was headlined “Tested: 2023 VinFast VF8 Proves Building Cars Is Hard.” In it, he wrote “the suspension is way underdamped, delivering a bounce-house ride.”

Ahead of the media launch, some within VinFast had internally warned about the vehicle’s shortcomings.

“A lot of people in that company absolutely said, ‘However astounding it is to get a car of this maturity on the road in three years, we can’t have a media launch yet,’” a former VinFast employee told The N&O. “So, you can imagine what it takes to basically decide to do it anyway.”

The answer, the former employee explained, is a headstrong startup that has often prioritized moving quickly over moving deliberately.

After the California test drives, VinFast did something else out of the ordinary: Before lifting its embargo on reviews, it reached out to the journalists and offered them $100 prepaid debit cards. Multiple auto reporters told The News & Observer this was atypical and that accepting the cards would have violated their publications’ ethics standards.

A VinFast spokesperson, who requested his name not be used in keeping with company policy, said the cards “weren’t for gifts or presents. Those were for their travel and meals and that was spelled out to everybody that attended.”

Carmakers do commonly provide travel and accommodations for reviewers to attend media launches. But any amount of direct payment is not standard, the auto journalists said. However, scholars who study modern Vietnam say the debit card offer doesn’t come as a surprise.

“It’s common in Vietnam for journalists to receive some payment when they attend big events,” said Eddy Malesky, a Duke University political science professor who specializes in Vietnam’s economic development.

Bill Frasure, an emeritus professor at Connecticut College who has organized educational programs in the country for the past 25 years, noted the test drive gift resembles the common Vietnamese practice of phong bì (literally meaning envelope), which people give as a tradition or to facilitate transactions.

“It is a standard part of contemporary Vietnamese culture in business and government,” he said.

Last spring’s underwhelming test drives and debit card gifts, combined with previous delivery delays, management turnover, and a shifting battery lease policy, revealed 6-year-old VinFast had a learning curve — both mechanically and culturally — as it attempted to break into the fiercely competitive U.S. automotive market.

Seven months later, construction is underway at VinFast’s first North American factory in eastern Chatham County, a projected $4 billion assembly and battery plant about 30 miles southwest of downtown Raleigh. In its incentive agreement with the state, the electric vehicle producer pledged to employ at least 7,500 workers at the site by 2027.

It is North Carolina’s first major car manufacturing site, fulfilling a statewide pursuit that dates back decades.

Chatham County and the state together allocated $1.25 billion in tax and other incentives for the company, including about $250 million for road and rail improvements in and around the plant. Most of the state incentive benefits are contingent on VinFast meeting future hiring goals.

Entering the new year, VinFast has arrived to North Carolina in another sense: In late December, the Raleigh-based Leith Automotive Group opened the country’s inaugural VinFast franchise dealership, a store in Cary with 60 VF8s in stock. This week, VinFast announced deals with four other dealerships in New York, Texas and Kansas. By the end of 2024, it hopes to be in 50 markets worldwide.

For a company that started producing electric vehicles in 2021, VinFast’s global dreams are undeniably ambitious. Yet those who’ve interacted with the fast-moving, deep-pocketed automaker say it has to adjust its operations to get where it wants to go.

‘Every three or four months, there’s a new set of people’

VinFast is a subsidiary of Vingroup, the largest private conglomerate in Vietnam. The conglomerate is owned by the country’s wealthiest person, Pham Nhat Vuong, who made his initial fortune selling instant noodles in Ukraine. He has a net worth of $4.6 billion, according to Forbes.

Vingroup businesses are ubiquitous in the Southeast Asian country of nearly 100 million people. Each subsidiary follows a similar naming pattern that hints at their purpose: Vinhomes (residential real estate), Vinmec (healthcare), Vinpearl (resorts), Vincom (shopping malls), Vinschool and VinUni (education), VinAI (artificial intelligence technology) and several others.

“The joke in Vietnam is: From birth to death, you do it in a Vingroup building,” Malesky said.

Launched in 2017, VinFast initially only produced gas-powered cars in Vietnam. Then in 2021, the company announced it would pivot to exclusively make electric cars and sell them both at home and globally. It represented the first major international expansion for a Vingroup subsidiary.

“Vietnam has not had a large number of big domestic companies that have been able to succeed abroad,” Malesky said. “VinFast is among the first big opportunities.”

In 2021, VinFast hired automotive executive Michael Lohscheller as its Global CEO. Lohscheller had most recently headed the German manufacturer Opel, and some viewed him as an ideal choice to helm a fledgling car company looking to navigate European and North American markets.

However, Lohscheller resigned within six months due to what the company called “personal reasons” and was replaced by veteran Vingroup executive Le Thi Thu Thuy.

“The move away from (Lohscheller), from an outsider’s perspective, was kind of unthinkable,” said the former VinFast employee who spoke on condition of anonymity when commenting on the startup.

In March 2022, VinFast announced its future North Carolina factory. That year, the company promoted its plan to require U.S. buyers to lease their car batteries via monthly subscriptions, a concept unfamiliar to most American customers. A few months later, the company made battery leasing optional before eventually scrapping the plan altogether.

“It appears that VinFast is kind of launching the car while they’re still working on a lot of these aspects,” said Bengt Halvorson, an editor with the outlet Green Car Reports. “They’re always very optimistic about timelines.”

In late 2022, VinFast brought its first batch of 1,000 VF8s from Vietnam to California. Yet these cars went undelivered for several months and initial delivery dates were missed. Early last year, VinFast also postponed the scheduled opening of its North Carolina factory from 2024 to 2025.

VinFast had only delivered 350 VF8s to U.S. customers as of last summer. And of the roughly 11,300 electric vehicles the company delivered globally over the first six months of 2023, more than half were purchased by Green and Smart Mobility, a Vietnamese taxi service controlled by Vingroup, filings to U.S. financial regulators show.

High turnover among VinFast leadership hasn’t helped steady operations, said Alex Guberman, an electric car content creator who partners with VinFast to produce promotional reviews for his YouTube channel, E for Electric.

“Every three or four months, there’s a new set of people,” he said. “I’m in the middle of my deal with them, and the direction has changed four times because new people are jumping in.”

Last winter, three top VinFast executives exited in short succession, including the chief marketing officer and chief service officer who left after the company reorganized its management model. In June, four other senior executives left.

Burnout was common, said Barry Weisblatt, who quit VinFast after six months in October 2022. Based in Vietnam, Weisblatt said he worked 18-hour days for six days a week setting up consumer finance platforms for VinFast customers in North America and Europe.

“VinFast is not for everybody,” CEO Thuy told the Wall Street Journal in December.

Those familiar with VinFast’s work culture describe it as hierarchical, with Vuong heavily involved in decisions. Even responses to media questions or small adjustments in pricing go up to the chairman for approval.

“Decision making is very much centralized in Hanoi,” Weisblatt said.

“A hundred percent to the chairman of the company, if you need approval, even for a relatively minor thing,” said the other former VinFast employee. Both he and Weisblatt saw this chain of command as a hindrance, with North America and European personnel having to wait for signoff from Vietnam before proceeding with certain daily tasks.

This lag between time zones could sometimes clash with the startup’s overall goal of moving quickly, the former employee said, and thus complicated its ability to keep up with competitors.

Independent reviewers wait for next test drive

Guberman, who is based in Thailand, spoke to the N&O in December. The next day, he flew to Vietnam to meet with VinFast representatives. Despite his partnership, Guberman didn’t soften his criticism.

“The other negative thing about VinFast is that they just don’t know how to (expletive) run a company that caters to Western customers and Western media,” he said.

This includes other awkward slip-ups with American reviewers. During a podcast in late 2022, prominent auto journalist Matt Farah shared that VinFast had offered him $10,000 on top of a free trip to Vietnam. Farah called the approach “shady.”

VinFast confirmed Farah’s account to the outlet Carscoops, explaining its third-party public relations firm, Blue C Advertising, had incorrectly identified Farah as an influencer instead of an independent journalist. VinFast told the N&O it no longer works with Blue C.

Since the flood of negative reviews in May, VinFast has sponsored promotional “reviews” from content creators who framed the VF8 favorably. Guberman released one in June. The next month, influencer Kim Java posted a paid promotion titled “My Brutally Honest VinFast VF8 Review!” — that is not very brutal. “I’m not really sure why we see some of these mixed reviews because I think the average person would enjoy this vehicle,” she says at one point during the review.

“The common industry practice of influencer marketing is a part of our integrated marketing strategy,” VinFast said in an email to the N&O. As part of its promotional. strategy, the company coordinated with Jimmy Kimmel Live! to have the talk show’s host drive a VF8 when he picked up pop star Olivia Rodrigo in a video that went viral last fall.

However, no independent journalists have been given the opportunity to test drive the latest VF8 model themselves. VinFast told the N&O “we will publish information about the test drive program as soon as it is available.”

The route to success

Those who have driven the VF8 believe it can be fixed.

“I think that their path to improving it, it’s not huge things,” Ezra Dyer of Car and Driver said. “It’s a lot of small things. And honestly, it comes down to price. If they have any leeway to cut the price, that’s what they need to do because they have no brand equity. Nobody’s buying VinFast because it’s the cool thing to have. Nobody knows what a VinFast is.”

The company currently markets its VF8 Eco model for $46,000 and its Plus model at $51,800. For comparison, Tesla’s Model Y SUV starts at $48,990. VinFast has other models, including a seven-seat VF9 and a mini-SUV called the VF3 that could sell for less than $20,000. Neither is available yet in the U.S, though VinFast plans to showcase the VF3 at the Consumer Electronics Show in Las Vegas next week.

According to the U.S. Environmental Protection Agency, the 2023 VF8 has a mileage range of 207 miles for its Eco model and 191 miles for its Plus. While the Tesla Model Y has a longer EPA-certified range, Dyer’s publication Car and Driver applauded the VF8 for besting its EPA range estimate. VinFast has also garnered praise for its extensive warranty, which covers 10 years or 125,000 miles.

Despite VinFast’s hiccups, Guberman believes the company is “definitely very determined” to break through with international drivers. “And they have the money,” he pointed out.

In 2022, VinFast flew groups of influencers and journalists to Vietnam for extravagant introductory tours, featuring stays at private-island resorts, lavish meals and elaborate stage productions. Guberman called it “the most luxurious (auto industry) trip I’ve ever been to.”

Since pivoting to EVs, the now-public VinFast has lost more than $5 billion. While Vuong has pledged additional funding, the company has also sought money elsewhere.

Emails obtained by the N&O show a top VinFast official reached out to the North Carolina governor’s office multiple times this spring to lobby for help advancing a $1.4 billion federal loan application from the U.S. Department of Energy. The loan application has not yet been approved. In October, VinFast announced a $1 billion agreement with the New Jersey-based investment firm Yorkville Advisors Global that will give VinFast another avenue for cash in exchange for company stock.

Frasure, who holds an honorary degree from Vietnam National University, emphasized the country with one of the world’s fastest-growing economies should not be underestimated.

“If Americans have this notion of Vietnam as sort of a backward, tiny little place, that’s just wrong,” he said. “I remember when people had the same attitudes about Germany and Japan (as car manufacturers) back in the 1950s. People had an attitude about Volkswagen that it was sort of funny. And then along came (Nissan) and that was funny too. Well, who’s laughing now?”

In recent weeks, VinFast has issued multiple press releases explaining it has corrected several of the VF8’s flaws. One was headlined: “Customer Concerns Addressed by VinFast: A Review of Updates to Noise, Vibration, and Harshness in the VF 8.”

“VinFast has meticulously fine-tuned the VF8’s suspension system, vehicle height, damper tuning, and spring tuning,” a separate release on Dec. 6 said. The carmaker added, “Passengers in the second row experience significantly less bumpiness and choppiness.”

While VinFast’s bumpy U.S. rollout may signal a company in flux, the executive reorganizations and the aborted battery leasing program could also indicate that VinFast is a startup adapting to market demands. The company describes its willingness to try new things as daring and acknowledges some initiatives have been more successful than others.

“What is indicative (of a good company) is trying to take feedback and improve its products and listen,” Dyer said. “If VinFast is doing that, then good for them, and I look forward to driving another one.”

One of the only recent independent VF8 reviews came out in late November, when the team behind the popular car review channel Throttle House (2.78 million YouTube subscribers) borrowed a personally owned VF8 to test.

“We have heard on multiple occasions about reviewers taking money directly from a car manufacturer,” Thomas Holland, one of the Throttle House’s lead creators, told The N&O. “However, we have never done that. Nor will we ever. We always remain impartial.”

Like the reviewers in Southern California last spring, Holland and cohost James Engelsman found the ride fell short. Two complaints were the sheer weight of the vehicle and a lag in its front suspension.

“Real talk, this car isn’t ready,” the duo concluded.

This story was originally published January 4, 2024, 5:30 AM.