VinFast, former Tesla competitor, flees Europe

VinFast is Expected to Close Its Showrooms in Europe. Radical Strategic Shift or Admission of Failure?

The German automotive news outlet Elektroauto-News.net reports that all showrooms and service centers in Europe are expected to close by May 9. An internal meeting held on May 2 reportedly informed 90% of employees of their dismissals, and negotiations for severance packages are to be finalized before May 22. Subsequently, assets will be liquidated and leases terminated in the second quarter.

Several reasons explain this decision, including macroeconomic conditions, tariffs, trade tensions, and overall uncertainty. In an internal document cited by Elektroauto-News.net, the company states that the direct sales model, inspired by Tesla, “no longer works.”

In the future, VinFast models are expected to be sold through dealerships. While 90% of the staff will be laid off, remaining employees will be transferred to new business partners, whose names have not been disclosed. However, the tight schedule raises questions about the implementation of this network.

Europe Is Not an Isolated Case

This strategic reversal echoes VinFast’s challenges in the U.S. market. The company has also announced the closure of its 38 owned outlets and plans to shift to a franchise model. Despite this apparent retreat, VinFast has stated its intention to establish an extensive network of dealerships in major European cities.

This transition comes as VinFast begins deliveries of its VF 6, the second model available in Europe after the VF 8. However, recent financial performance clarifies this strategic revision: although electric vehicle sales tripled in 2024 to reach 97,400 units, primarily in Asia, the company posted a net loss of $3.18 billion despite generating $1.8 billion in revenue.

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