VinFast, a Vietnamese manufacturer of electric vehicles, has reduced the leasing price by more than one-half for its first vehicles to be shipped to America, with shipments scheduled for this week, as reported by Reuters.
VinFast, a Vingroup JSC (VIC.HM) subsidiary, indicated that in January the first VF8 fully electric crossovers would be made available for leasing at a rate of $599 per month for two years. However, most recently the company website indicated that the cost of leasing a vehicle for a two-year period would be $399 per month.
According to Reuters, Vinfast informed customers who had made refundable deposits on the vehicles via text messages that the car would cost $274 in monthly payments in California, the first American state to receive the Vietnamese electric vehicles. That translates to a savings of 33% to 54% off the originally quoted monthly lease rate.
While issuing a statement, VinFast said that this was a unique offer being offered to its consumers who purchased the VF 8 City Edition cars in an effort to maintain their competitiveness with other companies, and that the company is planning to formally hand over the VF-8 City Edition cars to consumers on March 1, 2023. However, the company did not mention the number of vehicles included in the 999-unit shipment to California at the end of 2022.
The VF 8 City Edition is available in Eco and Plus trims, which have an EPA range rating of 207 miles and 191 miles, respectively.
This move is the most recent evidence of rising pricing competition among electric vehicle manufacturers. The leading electric vehicle producer across the globe, Tesla, reduced prices worldwide by nearly 20% in January.
The subsidies introduced by the Biden government on electric vehicles at the beginning of this year altered the calculations for American automakers as well as consumers. Before last week, VinFast wasn’t on the IRS list of 39 manufacturers that qualify for the subsidy. However, earlier in the month, VinFast announced that Bancorp would be responsible for financing the lease for its U.S. sales.
Up to $7,500 tax credit for customers is available for electric cars, such as those produced by Tesla in Northern America. Automakers are also allowed to claim this tax credit of not more than $7,500 for their electric vehicles if they are sold via IRS-recognized companies including financing organizations that are into car lease underwriting business.
VinFast intends to construct a manufacturing factory for electric vehicles in Northern Carolina and has registered for an initial public offering in the country.
VinFast looks determined to take on established EV firms such as NIO Inc. (NYSE: NIO). The net beneficiary of this competition is likely to be the consumer because more EV options will be available at competitive prices.
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