Was the plans of US expansion VINFAST failed? Why could shares drop to $ 0 | Motley fool

A list of disappeared car manufacturers in the US is a list along Santa for naughty children. In fact, there are roughly 100 extinct cars in the US that start with the letter “A.” This should read as a brand for brand new car manufacturers: the production and successful building of business is extremely demanding.

Car VINFAST (Vfs 0.31%) He jumped on the new Oversteas market without a consumer base that has always been gooy to be a battle uphill. Here is what went wrong and where the shares could go from here.

Unsuccessful entry

VINFAST was published at the right time, at a time when the market was very optimistic about electric vehicles (EV). This was a complicated thing before the Chinese began to sweep all over the world with affordable and advanced EVs and before EV served to gain traction in the US, as originally expected. All these developments have crippled the ability of VINFAST to compete when it entered lucrative American and European markets – a sharp contrast to its domestic Vietnam market, which often prefers electric wheels and scooters.

This optimism quickly disappeared with investors and probably in society itself. VINFAST had big plans for the US market when he entered around 2022 because he was struggling with the first medium -sized VF8 crossing to the ground. That was about the last thing that developed correctly.

The three -seater VF9 crossover arrived a year late at the end of 2024, and several smaller and more affordable crossover had to arrive at the US, as originally hoped. That was a big mistake because VINFAST NEDED created a market that did not exist. He needed to get his foot into the American market door, and his journey was through highly affordable vehicles.

VINFAST website still claims that the compact VF7 will be “available soon” and also the Crossover VF6, but both of them have been delayed for about a year.

Not only did it not come fast enough with the right products, but they also failed to distribute effectively. In fact, VINFAST recently opened its first franchise department in California, a highly valuable EV market. This ends his unsuccessful experience with a direct sales model that Tesla,, Lucidand RivianAmong other things, they achieved. VINFAST is all in conversion, with all 15 of its California showrooms with direct sale off because it is looking for more sellers of partners.

Another complication of things was the rapid development of tariffs on imported vehicles and automatic parts, and the US government ended the federal tax credit of $ 7,500. Both of these development threw plans for the successful entry into the US market, especially the sale, which delayed its opening factory in North Carolina until 2028. After admitting it was not planning to enter the market, the company is now lagging behind South Asia.

Cash fire

It is no secret that the company is quickly burning over cash and its loss has expanded during the second quarter. The expansion to the US and Europe was unsuccessfully omitted, partly leading to a greater net loss in the second quarter of $ 812 million. It will also need a strong second half of 2025 to reach its annual sales target, because it generated only 72.167 the first half.

One of the interesting aspects of VINFAST, and the investors hoped that an ambitious automaker would become a diamond in the harsh was his support from Vietnamet Man and the founder of PHAM NAT VUONG and his massive conglomerate Twentyryroup. Vuong passes again at the time of needing a $ 1.5 billion in Vinifast in exchange for SEFUL Reseaarch and development assets, helping to strengthen its finances because Appmprempre and spread worldwide.

What does it mean, what it

VINFAST is wrong. The company bleeds cash, failed to enter the American and European markets and will face intensive and growing competition from extremely affordable and advanced Chinese competitors in Asian markets. If VINFAST cannot break the code quickly and expand in the markets outside Vietnam, not only is not a growth story, but society may not reach the scale needed to make profits.

It would not be shocked if Twentyrup eventually gained VINFAST, one way or another, and it would disappear into the uncertainty under the conglomerate umbrella. Investors should still watch this share from secondary points. This ride could end before it really starts, at least international.