Vietnamese EV maker VinFast considers delaying $4 bln US plant, source says
Company says it is reviewing construction for US factory
The planned North Carolina plant was hailed by Biden
Loss-making VinFast is struggling to boost US sales
By Phuong Nguyen, Francesco Guarascio and Ben Klayman
May 29 (Reuters) -Vietnamese electric car maker VinFast VFS.O is looking at further delaying a planned $4 billion factory in North Carolina, a person briefed on the matter said, as the loss-making company struggles to gain favour with U.S. consumers.
VinFast announced in 2022 that it would build an EV and battery factory in the United States with an annual production capacity of 150,000 vehicles, seeking to take advantage of the Biden administration's efforts to approve subsidies for EVs made in America.
The company had initially planned to complete the factory in July 2024 but later pushed back the start of operations to 2025. It is considering another delay, the source said, asking to remain unidentified because the matter was not public.
VinFast, which sold fewer than 1,000 cars in North America last year, said in a statement to Reuters it was "conducting a thorough review and evaluation of all aspects of the construction process for our North Carolina factory."
North Carolina's Chatham County, where ground for the factory was broken in July, declined to comment about a possible delay.
A spokesperson for the county government said VinFast had twice revised the size of the factory's general assembly building. The latest revision was submitted in April and is still being reviewed by the county's permits department.
When VinFast announced in March 2022 its plans for the North Carolina factory, U.S. President Joe Biden said the plant would create more than 7,000 jobs.
"It's the latest example of my economic strategy at work," he posted on Twitter at the time.
Republicans won North Carolina in the 2020 presidential elections by a small margin and Biden's campaign is spending heavily to win the state in the November presidential election.
In addition to low sales, VinFast has been sued in the U.S. for not paying rent on a showroom. It also faces two separate probes - one over an April crash in California when four people died in an accident involving a VinFast VF 8 car; and one for allegedly violating ArcelorMittal MT.LU patents for aluminium used in the VF 8.
Vietnam sold fewer than 35,000 cars globally last year - the vast majority of that in its home market and despite having a factory in northern Vietnam with an annual production capacity of 300,000 cars.
Most of its cars sold domestically are also sold to related parties. Its net loss last year widened 15% to $2.4 billion.
OVERSEAS PLANS
Despite weaker global demand for EVs and a price war, VinFast said there have been no changes to its goal of selling 100,000 cars this year, twice as many as it targeted in 2023, as it expands abroad.
It sold under 10,000 vehicles in the first quarter but attributed that to the usual slow start of the year for business, especially in Vietnam.
By the end of June, VinFast plans to expand its vehicle line-up, including models with right-hand drive for markets like Thailand and Indonesia, it said, adding that the results should be visible in the second half of this year.
It also confirmed plans to establish an assembly plant in Indonesia and another assembly plant in India by 2026.
In Indonesia, "we expect to begin deliveries of the VF e34 model soon and will launch the VF 5 model within the second quarter," VinFast said, detailing so far unpublished plans for two of its economy cars.
Founded in 2017 and fully focused on EVs since 2022, VinFast, which has yet to make a profit, logged a net loss of $618 million in the first quarter. Revenues for the period nearly tripled from a year earlier but tumbled 31% from the previous three months.
Reporting by Phuong Nguyen, Francesco Guarascio and Ben Klayman; Editing by Edwina Gibbs
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