VinFast, the Vietnamese electric vehicle company hoping to compete with Tesla, is reducing its activities in Canada. Less than three years after launching with big promises and a direct-to-consumer approach, the company has decided to close five of its ten Canadian stores.
In late 2022, VinFast made its debut in Canada by quickly opening showrooms in Ontario, Quebec, and British Columbia. The company used Tesla’s strategy, opening stores in high-end malls such as Yorkdale in Toronto and Park Royal in Vancouver. All three mall-based locations, as well as two more showrooms in less central spots, will be shutting down by mid-2025.
VinFast Canada announced that it is closing its three boutique mall locations and two showrooms in outlying areas to focus on improving its long-term performance. It is a sign that the EV sector is facing bigger challenges. Startups are facing a drop in demand, higher interest rates, and more people choosing hybrid models, which are helping legacy automakers succeed.
The Yorkdale store, which once represented the Tesla-inspired retail concept, will be closed. Nevertheless, five showrooms will stay open, including the one in Mississauga near Highway 401. VinFast also suggested it might change its business model, hinting at expanding its after-sales service network and even considering franchise partnerships, which is different from its previous approach.
The decision by VinFast to pull out of the US is a sign of the difficulties many EV startups encounter in the automotive industry. With the support of a major Vietnamese conglomerate and dreams of going global, the company is finding out that ambition and branding alone are not enough. Since the EV market is growing and becoming more competitive, how a company performs matters a lot.
