When contributor Emme Hall attended the launch of Vietnamese upstart automaker VinFast’s VF8 City Edition for us, she encountered numerous problems with the vehicle. In fact, the entire rollout of VinFast in the United States has been plagued by problems. VinFast’s solution? Cash, cash, cash.
We’re starting to reach “New Coke” levels of bad with the VinFast product rollout, which continues to be the poster child for our mantra: Building Cars Is Hard. Details of the cash-for-headaches program are below, as well as a reminder that selling cars is hard, too. We’ll also talk about San Fran’s adoption of electric vehicles and Canada’s adoption of EV vans. It’s Friday, let’s do this thing!
(Oh no, I’ve just been informed it’s Thursday).
VinFast Will Pay You For Every Inconvenience
First, there was the botched preview of VinFast from writer Kevin Williams, who went to Vietnam to drive their cars only to decide they were not ready for America. He was correct. This was confirmed months later by our test drive, which involved multiple failures in vehicles. VinFast recalled all its cars to, in theory, correct these issues.
VinFast seems so sure its cars are up to snuff (or so in need of sales) that it’ll literally pay you if you have an issue. Here’s the company’s press release outlining how it works, but here are the key bits:
VinFast strives to promptly address all vehicle issues and provide customers with direct support including service vouchers or cash based on the issue. Specifically, these issues are classified into the following Types:
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Type 1 issues cause inconvenience(s) that do not impact the use of the vehicle. Eligible customers will receive USD 100 for each Type 1 issue they experience.
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Type 2 issues render a vehicle inoperable. In addition to providing roadside assistance, VinFast will provide eligible customers with USD 300 for each Type 2 issue they experience.
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Type 3 issues require a repair time of more than three days. From the fourth day onward, eligible customers will receive USD 100 for each additional day that their vehicle is being serviced by VinFast.
Could these deals be combined?
If Type 1 and 2 issues occur simultaneously, support will cover both Types. If a Type 3 issue were also to occur, eligible customers would also be entitled to Type 3 support.
It seems like it. Obviously, there’s a lot of fine print, and if you wreck or modify your car don’t expect support. Also, don’t modify a leased VinFast (which is the only way to get one) for obvious reasons. Or, honestly, please do modify a VinFast and then let us write about it.
The math here is pretty good. Currently, a VinFast lease is about $431 a month with a $4,965 downpayment. If you can get a Type 1 issue ($100) plus a Type 2 issue ($300) and they keep the car for five days, that’s $600 by my math. This is a 36-month lease so, if you’re unlucky enough to have the vehicle break down this way every month then you’ll be completely break even at about month 29 of the lease. Free car!
TrueCar Punts CEO, Lays Off Big Chunk Of Staff
True story. Yesterday morning our beloved editor, David, was kind enough to drive me to the airport at 5 a.m. Most people would say “Take an Uber” and, yet, David climbed into the i3 and piloted me toward LAX. As we drove down the 405 I noticed a building with a giant TrueCar sign on it and I thought to myself: “What’s the deal with TrueCar, the automotive listing service, these days? I should look into that.”
Welp, here’s the answer, summed up neatly in an Automotive News headline from last night: “TrueCar replaces CEO, lays off nearly a quarter of workforce”
Yikes. How did we get here? From the story:
TrueCar has been bleeding losses. In the first quarter, net losses grew to $19.6 million from a $12.4 million loss in the first quarter a year earlier and an $18.1 million loss in the fourth quarter.
The company made “this difficult decision after an extensive review” so TrueCar could “achieve its strategic priorities and create long-term shareholder value,” Carbone said. She also thanked Darrow for “his steadfast leadership and many contributions” to the company, including working as CEO permanently since 2020 and “through unprecedented challenges for our company and industry.”
This is something we’re going to see a lot more of going forward. Yesterday, the Fed decided not to raise rates, but it remains a difficult borrowing environment for companies. I was talking to a CEO friend yesterday whose startup is close to some big deals and is worried they’re not going to be able to get enough capital to make it to that point. I mean, even Pyrex is having trouble. Pyrex!
San Francisco Becomes First Market Area To Be 50% Electrified
Here’s an interesting fact from our friends at industry intelligence firm S&P Global: This March the San Francisco Designated Market Area (DMA) became the first major DMA in known history to have more new vehicle registrations be electrified vehicles than gasoline-powered vehicles. A whopping 34.2% of registrations were electric cars and another 15.8% were hybrid, which makes 50%. Gasoline vehicles were only 48.6% of new registrations.
This makes sense, both because San Francisco is a left-leaning place where people care about the environment, as well as the fact that there’s a ton of money in San Fran and EVs are still expensive. From S&P’s report:
One key demographic element among electrified buyers: They are well off financially. Almost half of San Francisco buyers (46.6%) enjoyed a household income of more $200,000, similar to the 39.9% for all EV buyers, but more than twice the ratio of non-San Francisco consumers at 22.6%. At the other end of the spectrum, only 15.7% of Bay Area buyers had household income of less than $75,000, close to the 14.7% for all EV buyers nationally but only half of the non-San Francisco average of 30.5%.
It’s the first time this happens. It won’t be the last.
FedEx Gets 50 Electric BrightDrop Vans For Canada
There’s been a lot of attention on the Rivian-based EV vans that Amazon is using, and those look great and seem to work. Quietly, though, GM’s BrightDrop EV commercial vanmaker has been delivering their own vehicles to FedEx. I’m a big fan of the company and of the Zevo 600. So far, there are about 400 of these running around Southern California and, actually, we saw one driving around Los Angeles this week.
According to The Detroit News, you can expect to see more of them in Canada as well:
FedEx, which has a goal to transition its entire fleet to all-electric, zero-tailpipe emissions vehicles by 2040, said the initial fleet of 50 EVs will service Toronto, Montreal and Surrey. FedEx Express Canada is planning to expand its EV fleet footprint as additional charging infrastructure is installed across the country.
Extremely cool.
The Flush
Assuming you needed/wanted to lease an Electric Vehicle and lived in California, what would VinFast have to do to persuade you to try out one of their vehicles? Is this enough? More?
The thought of being broken down on a LA freeway, in bumper to bumper rush hour traffic where it is not easy to hitch a ride or get a tow, is horrifying. Especially when anything not right on the coast is regularly over 100 degrees in the summer, and I’ve seen as high as 120 (in a suburb!) heading to Santa Barbra. I wouldn’t touch that thing if it was free and they still put out the inconvenience checks.
and VinFast goes bankrupt
Wow, so it’s now 100% accurate to say “they couldn’t pay me to drive one of those.”
Bringing back “The Flush” for a question about VinFast sums up things nicely.
It is not a good business model to bribe people to buy your cars. Every car fails at some point.
They made a good effort. The vehicle is attractive and spec competitive. But starting in the auto business is a really hard thing to do and car electronics are really difficult to make bullet-proof. They took their best shot and it bounced off the wall. Now they are shotgunning everything before the money runs out.
Can say the same about Hyundai and KIAs from the last century..
VinFast does have sharp looking cars. That said, they need to drop the price to be competitive. Having US manufacturing will help if they’re serious about the US market. By the time they’re competitive the legacy players will be out with new cars that are just as good but $7500 cheaper thanks to government slush (necessary to make the manufacturing infrastructure IMO).
I mean I’m surprised TrueCar is still around. It’s a bad business model. Like rootwyrm says, it doesn’t work for anyone involved. Customers have to pay for the service, TrueCar takes a cut, dealers have to pay to use it, etc. The other issue that I think people are glossing over is the fact that their site is less intuitive than Cars dot com or Autotrader. Both of those sites are ridiculously easy to use and I waste entirely too much time on them. They’re also both free.
I don’t find TrueCar’s site to be anywhere near as easy to use. I paid to use it back when I bought my GTI and I was starting to use it when I was N hunting in early 2022 and I just didn’t find it helpful. And not to brag or anything, but I’m damn good at finding a deal and I have excellent interpersonal skills due to the fact that I work in management in the mental health field. I know how to keep a situation calm and make sure everyone leaves on the same page.
So…yeah. I’ve never found it to be all that useful and I’m not surprised that it’s falling apart. It also doesn’t offer any information that you can’t find yourself through about 15 minutes of Googling, but for whatever reason normies find the car shopping experience to be this insurmountable hellish task so I get why “car shopping for dummies” sites are out there. I personally just car shop for my friends and family when they need something. I’ve gotten damn good at it too-I’ve found cars for one of my friends, my sister, my mom, my aunt, and my dad just ordered a car I helped him pick out and spec.
I’d consider making it an official side hustle but my main hustle is so much goddamn work every week that I rarely have the energy leftover to do much of anything with my free time other than cook, exercise, spend time with family, and lay on the couch. But who knows…I’m trying to develop someone I supervise into eventually taking over a lot of what I do. We’ll see how that goes. I honestly don’t envision myself still doing clinical work in 10 years anyway so it’s never too early to start thinking about an exit plan.
Worse yet, it partners with dealers to make that info even less useful.
TrueCar was useful to me once, early on when the service became available. Now that most sites have good pricing tools, I don’t bother trying to wade through the multiple clicks and handing over my contact info just to find the same deal I could get if I just browsed a few local dealer sites.
These days, I prefer CarGurus since I am looking for new or used car deals, not the super interesting or obscure. For the most part the interface works as well as the other big sites and they are local to me, I drive under the future headquarters in Boston (being built over the Mass Pike (I-90East/West) and the commuter rail lines) several days a week.
I haven’t looked at TrueCar in many years now so I don’t know if this is still the case, but once upon a time they used to show data on actual sales prices that I found to be very helpful. It gave me a good sense of what kind of deal was possible so I could start negotiating at that bottom end knowing that I wasn’t just wasting everyone’s time. They also used to have this info available for free so they also gave me what I needed without making any money either.
Vinfast is still not a good deal. If the car works you get to drive a mediocre EV for 3 years for $20,481 ($568 per month), plus taxes and other fees. I buy cars new and keep them for ~10 years. My previous vehicles ended up costing me $239 (Jeep JKU) and $107 (Honda Civic) when considering maintenance, the cost of purchasing the vehicle, and money received from trading them in. If the Vinfast is broken enough to bring the cost down, you will need to keep a reliable backup vehicle, which negates savings through breakdown payments.
This deal this makes sense if you have a cheap, reliable backup vehicle and don’t have anywhere you need to be most days. For everyone else, it sucks. If you want an EV, buy a used Tesla or a new Bolt (if you can find one). Those will be a bit more expensive than the Vinfast lease, but you can drive them for 7-8 years and trade them in for something new; they will be much cheaper overall than the Vinfast.
I would consider a lease if it were cheaper than buying the vehicle and keeping it for 7 years (I usually want a new vehicle after 7 years or so, although I keep them longer than that). I haven’t found any that have met that requirement, though.
If you live in the Toronto area right now and have an average commute (1 to 2 hours), the fuel savings would make this a free ride.
With a few failures, you would actually turn a profit.
It would take a LOT of failures to turn a profit, at which point the car wouldn’t be reliable enough to use for a commute.
I’m not considering the cost of gas since there are nice used EVs for a bit more money than the Vinfast. As an example, Carmax has a low mileage 2019 Model S for $35,000. If you paid $4695 down payment would be ~$650/month for 60 months (total cost $43,695). If you drove this for 7 years it would be $520/month (I’m not including maintenance costs since EVs don’t need a lot of maintenance). KBB says a 2012 Model S with 180K miles has a trade in value of around $8500; I’ll assume a 2019 has a comparable residual value (probably not true given how much these vehicles have improved in that time). If you traded your used Tesla in after 7 years, it would cost $419/month. The Tesla is $12,600 cheaper that leasing a Vinfast over that term.
A Vinfast would need 42 breakdowns to be cheaper than the Model S. That means your Vinfast would have to fail every 2 months to be cheaper than the Model S. The deal is even more lopsided if you consider Carmax has a 2020 Bolt for sale for $27,000.
The Vinfast deal sucks. I can’t believe a company thinks this is a reasonable strategy to sell cars.
Of course You should always factor in fuel costs when considering cost of ownership for a vehicle, and with fuel costs being what they are today, most EVs are a sound financial decision.
An average GTA commute is about 150km a day. In an average ICE vehicle, that will cost you about $150 per week, or roughly $600 per month, if you only use your car for going to work.
So you’re almost hitting profitability already. Throw in $100 for a minor failure and you’re making money.
I hope it didn’t sound like I’m implying that this is a better value proposition than a Tesla.
Tesla has the lowest cost of overall ownership of any vehicle I’ve seen. When you factor in resale, they still have no serious competition.
So no, this is absolutely not a better value than a Tesla, but it is a better value than most ICE vehicles.
What a week, huh?
[*] Please note that ‘bounced checks from VinFast’ are not classified as an inconvenience.
Hate to tell these folks (no I don’t,) but if you’re losing $19.6M a quarter and your entire business is literally “we run a website that collects car sale listings, connects buyers to dealers, and also sell a branded version to banks and dealers and other sites”?
The problem ain’t just the CEO. Especially when you charge people for the site, you charge dealers to be on the site, you take a cut of transactions through the site, and so on.
Like, seriously. If you’re losing a hundred million a year doing that? Dumping the CEO with a golden parachute and mass layoffs is not going to fix it.
Which is yet another nail in Rivian’s coffin. Again: they can’t compete on price, they can’t compete on volume, they can’t compete on quality, they can’t compete on service, and they can’t compete on R&D. Period. They do not have the money, simple as that.
And they’ve screwed themselves to boot, by hitching their entire business to Amazon at this point. Amazon is not interested in partnerships; it is only interested in suckers. Instead of building something that could be broadly commercialized, they signed a deal to do a to-spec exclusive product for the worst customer they could possibly find. By now, Amazon’s purchasing people have already called Rivian to tell them precisely how much they’re going to use this as an excuse to screw them over.
Especially since Rivian’s total contract is 100,000 units by 2030 (Amazon to determine which units,) and GM is forecasting 50,000 annual by 2025 pending customer approval.
To try it out? I’ll gladly take one for a test drive or a long term loan. Actually pay for it? Ha.
We have a bunch of EDV700’s in our area, and they look sharp, and seem to do the job well. I like them. But I think you’re right here. Rivian amounts to about what GM spends on office furniture, and if they’re serious about BrightDrop (they are) then this could get ugly really fast. GM just has WAY more resources at their disposal.
Having said that, I really want Rivian to succeed, I’ve actually had the chance to drive one and they’re pretty neat, but damn, their whole entire business is founded on diving into the deep end of the most competitive product categories on earth.
Just a few months back I was telling my kids & others about the New Coke disaster, the oldest 14yr had never heard of it and even my wife who came to the US in 2005 didn’t know about it. Perhaps if my wife had taken marketing classes it would of been a case. I don’t know if there will ever be a product blunder close.
VinFast is a new product & market, not taking a classic & screwing it up. Switching lime skittles to green apple, bud lights problem today will be talked about for a long time, outside of this site I see nothing on VinFast.
“switching lime skittles to green apple”
Finally someone says the important stuff. Green apple skittles were vile. If a mouthful of skittles was like listening to a band, green apple would be that one guy playing way too loud and wildly off key.
Fun fact: $100 = 2,352,500 Dong.
Huh huh. Dong.
I can’t wait til Yangwang debuts in the States. This website will break.
I mean, that’s not even top ten, honestly.
The path to pleasure starts with YankWang
Vinfast – make it work. I like most of the models. I want to see how to battery leasing goes.
Didn’t they kill that off as unworkable already? Seems like a more harebrained version of those better place battery swaps that never panned out
Nope on VinFast, an unreliable car is an inconvenience, possibly an expensive one, more expensive than the feel good money from them. I still would not touch one with a 10 foot pole. Feeble attempts at bribery of the captive lessee are not quality control.
Silly, foolish and stinky little turd car from Viet Nam? My neighbor is from Viet Nam. His coffee spit was epic when he saw this earlier today.
Vinfast, we fart in your general direction, your father was a hamster, and your Mother smelt of elderberry.
Actually Vinfast’s father was shot dead and mother raped by a group of american soldiers.
They’re cool with it now though so we can joke
Man, we went from Monty Python and the Holy Grail to Full Metal Jacket so fast I got whiplash.
I feel it’s more like we went from Jeff Dunham to Sacha Baron Cohen, but I suppose comedy is not really my thing.
I should probably lighten up and not talk about old shit lol
Now get that car outta here or I will taunt you a second time.
I’m waiting for some YouTuber to lease a VinFast and document the issues and the cashflow. Come to think of it, DT should do it – he’s in the area and is used to breaking down in bad areas at 2am. It would be a great traffic generator for the site.
Your math of breaking even assumes that your time waiting for tow trucks (in sketchy locations) and travelling to and from the VinFast dealer has no value. It would get old very fast for me.
If you’re lucky, you could make money on just Type 1 issues. Report every mild inconvenience until they buy back the car just to stop sending you hundreds of dollars.
Vinfast (such a name) would need to send me a couple pounds of good old vintage style Thai stick by courier pigeon. After a few days of consideration I would have to just say no.
Somethings are just not meant to be.
As long as I could maintain a backup vehicle, a VinFast that pays me for issues might be worth having around. A headache, probably, but a potentially profitable one.
“Also, don’t modify a leased VinFast (which is the only way to get one) … “
I was pretty sure I’d read that you could buy a VinFast, if you insisted, but then I also remember reading that City trims were lease-only. Everything about this venture is confusing.
I just really want people (not me) to be able to outright purchase these so that 20 years from now someone will trot one out at a C&C and people will go, “Holy crap! Remember those?” the way they do now when they see my Yugo.
How the hell is TrueCar losing $20 million or whatever in a quarter? What are they spending money on? What even is the point of them these days?
In 2010, their site was novel and being able to take estimated invoice and actual sale price data into a dealer streamlined negotiations.
Trying again in 2019, they had evolved to the backend for dime a dozen “buying clubs” and my experience trying to work with their associated dealers all came with hundreds or thousands in attempted hidden fees on top of the “truecar price”
Trying again in 2023, the “truecar price” is the same as what cars.com and cargurus have listed, only with a smaller selection
Useless, good riddance.
Before TrueCar existed, finding invoice price took a bit of work and could save you money. Once invoice price became easy to find, dealers/manufacturers made invoice price meaningless. TrueCar should have been able to adjust, since they use sale price data, but they wanted to get a cut of more than just straight ad revenue (via those “buying clubs”) and really burned themselves.
I’m only surprised they haven’t gone under already.
Hot damn now I want a VinFast. You could get a tidy profit off of all the mechanical problems.
My question is how much is it actually costing Vinfast to make these cars they’re trying to pass off as $50k cars? Or to rephrase, how much should it cost I guess as they could be just burning through money being a startup. Like if they list the VF-6 for $20k, then people would probably be all over it and not care about minor quality things as much. But they’re starting with the VF-8 for $50k(or more) and it is not up to $50k car standards, even with Tesla setting the bar.
If it’s only costing them $30k to make, go for the credits to sell and start at a loss like Tesla did until efficiencies catch up, people will be all over it and you wouldn’t have to do this payout deal. If they’re already selling at a loss at that price with those issues…ho-boy.
Money for breakdowns you say? I can absolutely guarantee I’d “luck” into the Toyota Camry of VinFasts…
A car with an SLA? More auto manufacturers should do that.
wait! what?
no mention of tesla nor EM??!?
ok…a photo and a credit – phew!
Buy a bad car.
Break it a lot.
Document every tiny failure.
Profit!
That’s how Doug Demuro go his start.
Well first, they’d have to drop the price.
There is room in the market for cars under 20k, electric or not