VinFast's U.S. Gambit: Can Emotional Appeal Overcome Structural and Regulatory Headwinds?

VinFast, the Vietnamese EV upstart, has made a bold bid to conquer the U.S. market with a strategy rooted in emotional storytelling—positioning its electric vehicles (EVs) as "family members" that embody Vietnamese innovation and ambition. Yet behind the glossy campaigns lies a complex reality: unresolved structural safety flaws, regulatory scrutiny over a fatal crash, and a troubling reliance on affiliate sales to prop up its financials. Investors eager to capitalize on the EV boom must weigh VinFast's growth potential against these risks, which could derail its U.S. ambitions.

The Emotional Edge: "Cars as Family Members"

VinFast's marketing leans heavily on cultural narratives. Its U.S. campaigns emphasize Vietnamese heritage, innovation, and the idea that its EVs are "more than machines"—they're companions for families. This approach resonates with consumers seeking authenticity in an oversaturated EV market dominated by Silicon Valley disruptors and Detroit stalwarts. The company's Super Bowl ad in 2024, depicting a Vietnamese-American family bonding in a VF8, was a masterclass in emotional branding.

But marketing magic alone cannot mask foundational risks.

Structural Safety Concerns: A Former Engineer's Whistleblow

The most pressing risk lies in VinFast's engineering integrity. Hazar Denli, a former Tata Technologies engineer who worked on VinFast's chassis designs, alleges critical flaws in the VF8 and VF9 models. He claims the front suspension components—specifically the strut-to-knuckle connection—are prone to loosening, risking wheel detachment during sudden maneuvers or pothole impacts. Even more alarmingly, he states these parts were designed to last just 15,000–25,000 miles, a fraction of the industry-standard 150,000-mile lifespan.

These concerns align with the National Highway Traffic Safety Administration's (NHTSA) ongoing investigation into a fatal April 2024 VF8 crash in California. The probe, expanded in September 2024 to cover 3,118 vehicles, focuses on steering malfunctions and lane-keeping system failures. While VinFast insists its systems are safe, the NHTSA's findings—expected by late 2025—could validate Denli's claims, triggering costly recalls or lawsuits.

Regulatory Scrutiny: The VF8 Crash and Trust Deficit

The NHTSA's probe into the Pleasanton crash, which killed four people, is particularly damning. The complainant reported prior instances of the VF8's lane assist system veering the vehicle out of its lane—issues VinFast allegedly failed to address. Fire safety is also under the microscope: the crash vehicle caught fire post-collision, raising questions about battery integrity.

If the NHTSA concludes a safety defect exists, VinFast could face mandatory recalls, fines, or even a ban on imports—a nightmare scenario for a company already struggling to meet U.S. demand. The incident has also fueled calls for stricter oversight of foreign automakers, potentially slowing VinFast's expansion.

The Affiliate Sales Conundrum: Growth or Dependency?

VinFast's financial health hinges on its ability to shift from affiliate-driven sales to retail success. In 2023, a staggering 72% of its sales were to related entities, such as Green SM (GSM), a taxi firm 95% owned by VinFast's billionaire founder. This incestuous model inflated sales figures but masked weak retail demand. By late 2023, only 265 of 3,118 imported U.S. vehicles were registered by private buyers—a paltry 8%.

VinFast's plan to triple sales to 100,000 units by 2024 (from 35,000 in 2023) relies on its delayed North Carolina factory, now set to open in late 2025. Yet even if production ramps up, without genuine consumer traction, the company risks becoming a cautionary tale of overextension.

Investment Implications: A Risk-Adjusted Call

VinFast's U.S. strategy is a high-stakes bet. On one hand, the EV market's long-term growth is undeniable, and VinFast's price competitiveness ($30,000–$50,000 range) could attract budget-conscious buyers. Its partnership with Tata Group and plans for Asia-centric expansion also hint at global scale.

Yet the risks are existential. The NHTSA's findings, due by year-end, could expose VinFast to recalls that erode confidence. Its reliance on affiliates underscores a lack of organic demand, while delays in North Carolina threaten its cost structure. For now, investors should proceed with caution:

• Wait for Regulatory Clarity: Hold off until the NHTSA concludes its probe. A clean bill of health could unlock value, but a defect finding could crater the stock.
• Monitor Retail Adoption: Track U.S. registrations beyond affiliates. If sales to private buyers exceed 30% by late 2025, it signals progress.
• Watch Liquidity Metrics: VinFast's cash reserves ($96.6 million as of Q1 2025) are thin against $6.3 billion in liabilities. A liquidity crunch could force more dilutive financing.

For aggressive investors willing to bet on EVs, VinFast offers upside—but only if it can transform its narrative from "family car" to "trustworthy automaker." Until then, this is a story of hope clashing with hard reality.

Final Take: VinFast's U.S. journey is a test of whether emotional branding can transcend structural flaws and regulatory risks. Investors should proceed with eyes wide open—and wallets half-closed—until the company proves it can deliver safety, scalability, and real demand.