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Vietnamese EV Maker VinFast Considering Delay of $4 Billion US Plant

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Filed under Automotive, EV News, News, VinFast

Vietnamese electric vehicle (EV) manufacturer VinFast is contemplating another delay in the construction of its planned $4 billion factory in North Carolina. This consideration stems from the company’s ongoing struggle to gain traction with U.S. consumers, according to an anonymous source familiar with the situation. Initially announced in 2022, the factory was designed to have an annual production capacity of 150,000 vehicles and leverage U.S. government subsidies for domestically produced EVs.

Delays and Setbacks

VinFast initially aimed to complete the factory by July 2024, but this timeline was subsequently pushed to 2025. The latest potential delay indicates further challenges in the project’s progression. The company is currently conducting a comprehensive review of the construction process for the North Carolina plant, as confirmed by a statement to Reuters.

Local and Government Reactions

Officials in Chatham County, where the factory is being built, have not commented on the potential delay. However, they noted that VinFast has twice revised the size of the factory’s general assembly building, with the latest revision still under review. The original announcement in March 2022, which highlighted the creation of over 7,000 jobs, was praised by President Joe Biden as part of his economic strategy.

VinFast’s challenges are not limited to construction delays. The company has been sued in the U.S. for not paying rent on a showroom and is facing two separate investigations: one related to a fatal crash involving a VinFast VF 8 car in California and another concerning alleged patent violations involving ArcelorMittal’s aluminum.

Global Sales and Financial Performance

In 2023, VinFast sold fewer than 35,000 cars globally, primarily in its home market of Vietnam. Despite having a factory with an annual production capacity of 300,000 cars in northern Vietnam, the company reported a 15% increase in net loss, amounting to $2.4 billion for the year.

Expansion Plans

Despite facing a global EV market slowdown and a price war, VinFast remains committed to its goal of selling 100,000 cars in 2024. The company plans to expand its vehicle lineup by mid-year, including right-hand drive models for markets such as Thailand and Indonesia. Additionally, VinFast is moving forward with plans to establish assembly plants in Indonesia and India by 2026. The first deliveries of the VF e34 model in Indonesia are expected soon, with the VF 5 model launching in the second quarter.

Founded in 2017 and solely focused on EVs since 2022, VinFast continues to operate at a loss, reporting a net loss of $618 million in the first quarter of 2024. Despite this, revenues nearly tripled compared to the same period the previous year, although they fell 31% from the last quarter of 2023. The company remains optimistic about its expansion and sales targets, looking to strengthen its global presence in the coming years.

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