New delays for Vinfast, used car supply drops, EV registration data

Hey everyone. Glad to have you back for another edition of the daily roundup which you can now find every weekday morning on my news site Car Dealership Guy News.

This brand new site offers deeper automotive insights and expanded stories that you’ve been asking for—all with a clear, concise, no-fluff approach. Comment on this post to let me know if it adds value for you…or if it doesn’t.

Without further ado, let’s get into it.

—CDG

1. Vinfast struggles to break into U.S. market, faces delays with N.C. plant

Since entering the U.S. EV market in early 2023, Vinfast is still trying to find its foothold in America and abroad.

State of play:

• In 2023, Vinfast delivered less than 35,000 vehicles globally, more than $15,000 shy of its 50,000 target. 

• In Q1 2024, the Vietnamese automaker reported 9,689 EV deliveries—28% lower than the previous quarter. 

• Over 70% of the EVs delivered last year were for other companies owned by Vinfast founder Pham Nhat Vuong.

• Vinfast lost about $5.7 billion over the past three years.

Behind the numbers: One explanation for Vinfast’s troubles could be weakening EV demand. 

According to data from Kelley Blue Book, in Q1 2024, Americans purchased a total of 268,909 new EVs, a 2.6% increase year-over-year but a 15.2% drop from Q4 2023.

While EV market share is still expected to grow in the U.S. in 2024, the pace has slowed since last year. In Q1 2023, EV volumes were up 15.5% from Q4 2022.  

What the experts are saying: “Crucial strategic decisions regarding capital expenditures in the electrification space need to be made in the near term. Several OEMs are beyond the point of no return in their shift to EVs, while some suppliers might be questioning the wisdom of going ‘all in’ on EVs quite so soon,” writes S&P Global Mobility’s Director, Auto Supply Chain and Technology, Graham Evans.

Much of the outcome will hinge on delivering affordable mass-market EVs at scale.

For Vinfast: Deliveries accounted for only 12% of the 300,000 vehicle production capacity at its manufacturing plant in Haiphong, Vietnam.

Zooming in: As of December, VinFast has shipped 3,118 cars to the U.S., reports Hunterbrook Media. Of those cars, only 265 had been sold when measured by EV registration data.

Why it matters: To expand its presence in the U.S., Vinfast decided to invest $4 billion in a manufacturing plant in Chatham County, North Carolina. The new plant would be able to produce an additional 150,000 vehicles. 

Originally, the plant was going to open this year. Now, chairwoman Le Thi Thu Thuy says the factory is “on track to start the operation by the end of next year.”

But now: Construction is on hold while Vinfast submits new plans to scale the new facility, reports the Raleigh News & Observer. 

VinFast first revealed the project in March 2022 after receiving a combined $1.25 billion in incentives from North Carolina and Chatham County, including more than $300 million in payroll tax benefits tied to specific hiring and investment goals. 

Under the terms of a state investment grant, VinFast committed to creating at least 1,997 jobs by the end of the year, but the likelihood of that is in question. 

What do you think?

Market Watch

2. Used car supply drops at the beginning of April

At a glance: Increasing used car sales in March brought down days supply at the start of April, in line with spring seasonal trends and tax refund season, according to analysis of vAuto Live Market data from Cox Automotive. 

Quick facts (as of April 4, 2024): 

• There were 2.22 million unsold used vehicles on franchised and independent dealer lots.

• Used car inventory fell to an average of 44 days.

• Used car sales were up 5% year-over-year.

• The average used-vehicle listing price was $25,540, down 4% from this time last year.

But there’s more: At the beginning of April, used EVs almost reached price parity with used gas-powered cars, according to a Manheim presentation from Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive.

The average used EV retail price dropped to $33,645, while used gas-powered cars cost, on average, $32,035, a difference of just $1,610.

The plunge in used EV prices is good news for potential buyers. It also explains the skyrocketing increase in used EV sales year-over-year. 

Key quote: “Our data sets indicate used EV sales will begin increasing rapidly from here, following a clear path set by new sales. In Q1, our team at Manheim processed a record number of used EVs in the wholesale market. This is an approaching challenge for the industry we’ve already begun to embrace, as placing a value on a used EV is a new set of skills we all need to develop and refine,” said Jonathan Smoke, chief economist of Cox Automotive.

Through Q1, Manheim wholesale locations across the U.S. processed nearly 9,800 used EVs, an increase of 40% from the same period in 2022.

And with trade-ins being directly retailed by the dealer, these numbers could be even higher. 

Yet, this may not be good news for car buyers who bought a new EV for top dollar and are now facing lower resale values.

3. EV registrations fell in February, Tesla still leads the pack

Big picture: In February, the total number of EV registrations fell by 2.8% to 78,361, according to S&P Global Mobility data. This is a sharp decrease from January when EV registrations were up 15%.

Tesla sets the tone: While still the leader in registrations by a wide margin, Tesla fell by 25% year-over-year, reports Automotive News. 

The primary reason behind this is likely cost. There are only a handful of new EVs on the market for less than $35,000.

But also: 

• Registrations for the Tesla Model 3 were down by 73%, likely due to losing its $7,500 federal at the start of the year and a refreshed design slowing down production. 

• The Model Y, on the other hand, does qualify for the tax credit, but registrations were still down 6.7%.

The result? Steep price cuts from the EV maker and layoffs.

On Friday, Tesla announced a $2,000 price reduction in the U.S. for its Model Y, Model X, and Model S vehicles.

We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.

• Time for something different? Dealer marketing platform Fullpath is hiring a ton of different roles across the country right now, including support specialists, sales managers, and OEM operations managers.

• Prefer to be inside a dealership? Grubbs Family of Dealerships is hiring an automotive sales consultant in Grapevine, TX.

• Have experience in finance? Withum is looking for an automotive dealership tax manager.

Looking to hire? Add your roles today—it’s 100% free.

Thanks for stopping by. I’ll be here tomorrow with even more automotive insights and news—same time, same place.

— CarDealershipGuy