A Giant Awaits Tesla in Its Newest Move to Boost Global Sales

If you follow the global automotive industry or Tesla (NASDAQ: TSLA) you likely know that the electric vehicle (EV) maker has a big China problem. To be fair, all automakers in China, domestic or foreign, have a China problem amid the country's economic uncertainty and a brutal EV price war that has squeezed margins across the board. To combat this, Tesla is opting to send vehicles from its Shanghai plant to more profitable destinations in Asia.

That has Tesla's sights on Vietnam, a fast-growing economy with EV sales more than doubling last year. But Tesla will face a local powerhouse with 92% of the domestic market. Of course, Tesla has at least one advantage that could help it not only boost global sales but also improve margins.

Exports to save the day!

One only has to glance at Tesla's domestic sales in China and its exports to see the trend: Through the first eight months of 2026, Tesla delivered just over 316,000 vehicles in China, down 12% from the prior year. On the flip side, Tesla's export volume over that same time period rose 115%, topping 331,000 vehicles.

Considering export sales are generally more profitable than domestic sales in China right now, it's a prudent move. Now Tesla has started exporting Chinese production to Vietnam, which became Southeast Asia's largest EV market last year, with 40% EV market share of new car sales in the region. During the second quarter, EV sales in Vietnam surged nearly 90% compared to the prior year.

But standing in the way of Tesla's otherwise sound strategy is VinFast Auto (NASDAQ: VFS), which, again, has captured a remarkable 92% of the Vietnam EV market.

"It would be difficult for Tesla to compete with VinFast in Vietnam because VinFast has advantages that go well beyond product availability," Koketso Tsoai, senior auto analyst at BMI, told CNBC.

Only veteran auto industry investors will have heard of VinFast, especially given its debacle entering the U.S. market, marked by consistent quality issues, a transition from direct-to-consumer sales to a dealership network, and an ultra-thin product lineup of just two vehicles.

Despite its failure in the U.S. market, it's an entirely different game on VinFast's home turf. Tesla does, however, have a few things in its favor. VinFast can't compete with Tesla on its global brand image or its advanced technology and software, including its controversial full self-driving functionality, all of which appeal more to premium EV buyers in Vietnam hoping to stand out. VinFast vehicles with such a commanding market share have become commoditized, giving Tesla a perfect opportunity to export its premium China-made vehicles.

What it all means

Vietnam is a different animal from other Southeast Asian markets Tesla has entered. Consider that Thailand's EV market has a more mature production ecosystem and a range of well-known, affordable Chinese-brand options, while Indonesia's market is primarily focused on battery materials and incentivizes local production.

On the one hand, Tesla won't need to generate EV demand from scratch in Vietnam, with market awareness already high; on the other hand, it will have to prove that its brand, ownership experience, and technology all deserve a premium over the local stalwart. All that said, this is but one move of many that Tesla is making to boost its operations in China amid the critical market's instability and price war. That alone makes this development worth noting for investors.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.