- “Critics agree: The VinFast VF8 is very, very bad,” read the headline in the car-focused outlet Jalopnik.
- “Unfortunately, this move has all the marks of the North Carolina state government taking a bet on a company that needs a bailout to remain solvent,” said Donald Bryson.
Safety, quality, and monetary concerns are being raised about a Vietnamese electric vehicle maker that has its sights set on building a $4 billion EV production plant in Chatham County.
Reviews on VinFast’s latest model, VF8 City Edition, have sparked words like abysmal, “very, very bad,” “yikes,” “simply unacceptable,” and “return to sender.” A vehicle definitely “not ready for primetime.”
The highly respected MotorTrend, which made its debut in 1949, said VinFast had the right idea, but the VF8 is nowhere near ready for customer deliveries that are already taking place.
The reviewer said he would be embarrassed looking a customer in the eye while handing over the keys to the vehicle. He said basic functions don’t work reliably, including the HVAC system, which had multiple temperature issues that could never be set correctly, the embedded navigation system was nonfunctional, as well as blind-spot monitoring. Processing commands took a long time, or not at all, as the screen wouldn’t understand commands even after typing them out correctly.
Perhaps most concerning are the issues of the vehicle once you begin to drive it.
“Put the VF8 in reverse to back out of a spot, and the whole car shudders violently,” said writer Scott Evans. “The parking brake doesn’t release until you step on the accelerator, and once you do, there’s no hold function, so you’d better keep Creep mode engaged so it’s always sending power to the motors. Disable Creep, and the car will roll away in gear. I nearly rolled backward into another car at an intersection like someone learning to drive stick.”
Evans also said, while adaptive cruise control and lane-centering steering assist work well, there are no apparent safeguards, and can be activated on any road at any time.
Road & Track says, “Over a 90-minute drive, the 5,600-pound SUV never stopped bobbing, swaying, and bucking, producing near-constant head-tossing motions.” The site’s test driver “became car sick for the first time in years” riding in the passenger’s seat.
InsideEVs said, “The steering response is nonlinear and inconsistent, and there is absolutely no feedback delivered through the wheel.” They also said the VF8’s official EPA range numbers are bad: 207 miles for the Eco and 191 miles for the Plus, which puts it behind just about every other electric crossover on sale today.
Evans points out that the company needs to move at lightning speed to fix the issues before the VF6, VF7, and VF9 EV SUVs arrive later this year for any hope of surviving in this market.
But there is a positive from reviewers. The vehicle comes in beautiful exterior colors.
In addition to the bad reviews, questions are being raised about the company having enough money to operate in the U.S.
According to a December filing with the U.S. Securities and Exchange Commission (SEC), VinFast lost $1.3 billion in 2021 and close to $1.5 billion in the first three quarters of 2022,
Last week, the company announced that it would merge with special-purpose-acquisition company (SPAC) Black Spade Acquisition Company, allowing it to go public through a stock offering in the U.S.
The transaction is expected to be completed in the second half of 2023 and will value VinFast at approximately $27 billion with an equity value of $23 billion. After the transaction, existing shareholders of VinFast will hold approximately 99% shares of the combined company.
Black Spade Acquisitions, a Hong Kong-based SPAC, was first listed on the NYSE in July 2021. VinFast had wanted to list its own IPO but withdrew, citing market conditions.
“Unfortunately, this move has all the marks of the North Carolina state government taking a bet on a company that needs a bailout to remain solvent,” said John Locke Foundation President Donald Bryson. “It happened with Credit Suisse, and now with VinFast — who just in February said they had no plans to inject more cash into the company and were falling well behind on construction for a plant. Unelected bureaucrats in the state Department of Commerce cannot have enough knowledge of the economy to invest taxpayer dollars wisely.”
Parent company Vingroup, Vietnam’s biggest conglomerate, and founder Pham Nhat Vuong pledged the startup company $2.5 billion in funding last month.
Last month, VinFast’s U.S. manufacturing CEO, Van Anh Nguyen, joined Gov. Roy Cooper in announcing a partnership with Central Carolina Community College to train potential employees for their proposed facility in Moncure, which will use eminent domain to complete the project.
They met at what will be known as the college’s Moore Manufacturing and Biotech Solution Center in Sanford, Lee County.
About $50 million is still needed to renovate the building before any training or activity can occur. Reports say officials hope state lawmakers will help foot the bill for the remaining portion. Once the funding is secured, Nguyen said they plan to hire and train people in 2024 before vehicle production starts in 2025.
The merger would also help secure funding for the Moncure site, which still needs money to help with the project.
“Black Spade has more experience and respect in raising funds, something that VinFast needs to do,” said Mike Walden, William Neal Reynolds distinguished professor emeritus of economics at N.C. State. “So, it is a transaction that VinFast hopes will provide the expertise it doesn’t have.”
Published reports say that SPACs are seen as a quick route to the stock market, especially for auto technology firms, and have proven popular with investors seeking Tesla-like stock valuations, but the valuation of merged firms often falls in the months after listing.
The company’s merger with Black Spade follows in the footsteps of other EV companies like Microvast despite the cooling of a once feverish SPAC market. According to Reuters, SPAC has been subjected to closer scrutiny by the U.S. Securities and Exchange Commission.
Taxpayer money flows
More than a year ago, the company first announced its plans to build the fully automated electric-vehicle assembly and battery-manufacturing plant at Triangle Innovation Point in Moncure. The company said they planned to hire over 7,000 workers. To attract the newly formed company, the state, and Chatham County committed to spending nearly $1.2 billion in incentives over the next 32 years.
Using the state’s Transformative Job Development and Investment Grant program (JDIG), VinFast could get up to $316.1 million in reimbursement from the state over three decades if the company meets hiring goals. The state is spending another $450 million on infrastructure around the site. The total state appropriation is estimated at $766 million, with Chatham County giving VinFast another $400 million incentive package.
Signs of Problems
In January, VinFast announced that it was consolidating its U.S. and Canadian strategic business and management operations into a single unit called VinFast North America, headquartered in Los Angeles.
The next month, the company announced it was cutting 80 jobs in the U.S., including its chief financial officer. Three sales executives also left the company.
In March, VinFast announced that it would push off production at the Moncure site from 2024 to 2025, citing the need for “more time to complete administrative procedures.”
As was previously mentioned, eminent domain is being used to complete the project in Moncure. Reportedly, Phase 1 of the project is estimated to relocate three businesses, 11 homes, and Merry Oaks Baptist Church; Phase 2 is estimated to impact two more businesses and 16 homes.
The twists and turns of the company leave many in doubt of its future viability in North Carolina.