Vietnamese electric car maker VinFast has reportedly cut the lease price of its first model shipped to the United States by more than 50 percent. The model, which will be available to customers in California, will begin shipping this week.
VinFast is a subsidiary of Vietnam’s Vingroup Group. In January, the company said that its first all-electric model, the VF8, would cost $599 per month for 24 months (currently about RMB 4,169). But by Monday, the company’s website showed that the rental rate had been lowered to $399 per month for 24 months (currently about RMB 2,777).
In California, the monthly rental price has been further reduced to $274 for customers who have paid a refundable deposit, according to information sent to potential buyers by VinFast (currently about RMB 1,907). California will be the first U.S. state to receive the VF8 model. This equates to a 33% to 54% reduction in monthly rental prices from the initial announcement.
In a statement, VinFast said, “This is a special offer we are making to our customers for the VF8 City model to remain competitive with other brands. We will officially deliver the VF8 City Edition to our customers on March 1.” The company did not announce the exact number of deliveries.
VinFast’s move is a sign of the intensifying price war among global electric car makers. In January, Tesla announced price cuts of up to 20 percent worldwide. However, the company followed up with small price increases for certain models in certain markets.
The U.S. government’s new tax exemption for electric vehicles, which took effect earlier this year, has also affected the considerations of automakers and U.S. consumers. Electric cars like those produced by Tesla in North America are eligible for a $7,500 (currently about RMB 52,125) excise tax credit. Businesses, including financial services companies that underwrite car leases, can also claim up to $7,500 in tax credits if the electric car is sold by an IRS-certified company. As of Monday, however, VinFast was not one of the 39 “qualified manufacturers” recognized by the IRS.
Earlier this month, VinFast said that U.S. bank Hopewell would provide financial leasing services for the company’s U.S. sales. Last November, VinFast also reached an agreement with Autonomy to purchase 2,500 of VinFast’s electric vehicles on a monthly subscription basis.
In a separate statement, VinFast Chairman Li Qiusui said that following the U.S. market, VinFast will also deliver electric vehicles in Canada, France, Germany and the Netherlands. Currently, the VF8 City is available in two models with a range of 333 km and 307 km respectively.
VinFast has filed for an IPO (initial public offering) in the U.S. and plans to build an electric vehicle assembly plant in North Carolina.
