Mobility Portal, Spain
Date: September 8, 2023
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By Mobility Portal

The EV manufacturer VinFast is slowing down its European expansion

VinFast is slowing down its European expansion due to the complex regulatory environment and increasing competition from China.

According to industry experts, VinFast, the Vietnamese electric vehicle (EV) manufacturer, is slowing down its European expansion due to the complex regulatory environment and increasing competition from China, raising doubts about which part of the European market it can capture.

While the company opened its third showroom in Germany last summer and expanded operations in the Netherlands and France, its decision to withdraw from the IAA Mobility fair in Munich represents a “stagnation” for the company, especially amidst its launch plans.

VinFast had planned to start delivering its “VF 8” and “VF 9” SUVs in Europe last year but struggled to quickly meet the approval requirements set by authorities.

While company executives blamed European regulations, experts say VinFast “jumped the gun,” as it hadn’t even established itself in Vietnam and made poor decisions about expanding operations in Europe.

VinFast still doesn’t have a significant market share, not even in Vietnam,” said Nguyen Huy Vu, an economist based in Norway. “Their cars are said to have many technical problems. And their brand is not considered reliable.”

According to analysts, for a foreign firm to enter the European electric vehicle sector, it must first prove its worth in its own market and then be able to transfer that reliability and affordability.

It’s worth mentioning that in May, VinFast was forced to recall all vehicles it had sent to the United States due to a software defect. As of the end of June, the company had only sold 105,000 vehicles, while BYD sold 1.1 million vehicles.

Questions have also arisen about how VinFast has designed its European expansion.

“VinFast’s decision to build its own sales network in Europe instead of working through established local dealerships is ‘madness’,” said Matthias Schmidt, director of Schmidt Automotive Research, a Berlin-based automotive industry market analysis firm.

Unlike VinFast, BYD decided to use dealer franchises and established service networks in Europe.

VinFast insists on European expansion

A VinFast spokesperson in Hanoi told that Europe remains one of the key markets, and the company plans to complete the necessary steps to launch its latest model, the VF 8, in European markets in the last quarter of 2023.

“At the same time, we prioritize understanding the operation and service system to provide customers with a worry-free experience during the ownership process of an electric vehicle,” the spokesperson added.

Recently, VinFast signed collaboration agreements with companies like Fixico in the Netherlands and the German multinational E.ON Drive to develop an “after-sales ecosystem,” in which these European partners will be responsible for spare parts and service.

The spokesperson admitted that differences in regulatory requirements among EU markets were one reason why VinFast “took longer than expected” to be fully ready to launch its first electric vehicle on the continent, following last year’s delays.

However, it has now completed compliance checks with the European Whole Vehicle Type Approval System, meaning certification in one EU country applies throughout the EU for its VF 8 model.

VinFast has also received vehicle registration approval in France and is now working with authorities in Germany and the Netherlands for similar approval.

VinFast faces a tough battle to access a highly competitive market, with low-cost Chinese models set to launch in Europe by the end of 2023. BYD, which surpassed Volkswagen as China’s best-selling brand this year, presented six models for the European market in Munich this week.

“Europe lacks a solid and consistent approach to increasingly tough external competition, supported by governments combining their ecological and digital transitions with national resilience in a combative and decisive manner,” said Sigrid de Vries, director general of ACEA.

China has its sights set on the European market, with the potential to fundamentally change the face of European industries as we know them.”

Read more: Automotive Sector to von der Leyen: “Urgent” Call to Transform Industry with eMobility in Mind

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