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Vietnamese electric car maker VinFast is considering further delaying plans to build a $4 billion factory in North Carolina as the money-losing company struggles to win over U.S. consumers, according to people familiar with the matter.
VinFast announced in 2022 that it would build an electric vehicle and battery factory in the United States with an annual production capacity of 150,000 vehicles, hoping to take advantage of the Biden administration’s efforts to approve subsidies for American-made electric vehicles.
The company initially planned to complete construction in July 2024 but later pushed back the start of production to 2025. The company is considering another delay, the sources said, asking not to be identified because the matter is private.
VinFast, which sold fewer than 1,000 vehicles in North America last year, said in a statement to Reuters that it was “conducting a thorough review and evaluation of all aspects of the construction process for the North Carolina plant.”
The plant broke ground in July in Chatham County, North Carolina, which declined to comment on the possible delay.
A county government spokesman said VinFast has revised the size of the factory’s final assembly building twice. The latest revision was submitted in April and is still under review by the county’s licensing department.
When VinFast announced its plans to build a factory in North Carolina in March 2022, U.S. President Joe Biden said the plant would create more than 7,000 jobs.
“This is the latest example of my economic strategy working,” he tweeted at the time.
The Republican won North Carolina by a narrow margin in the 2020 presidential election, and Biden’s campaign is investing heavily to win the state in the November presidential election.
In addition to sluggish sales, VinFast has been sued in the US for failing to pay showroom rent. The company is also facing two separate investigations – one into a VinFast VF 8 car accident in California in April that killed four people, and another into alleged infringement of ArcelorMittal’s VF 8 aluminum patent.
Last year, Vietnam sold fewer than 35,000 cars worldwide, the vast majority of which were sold in its home market, despite a factory in northern Vietnam with a capacity to produce 300,000 vehicles a year.
The company, which also sells most of its cars domestically to affiliates, reported a 15% increase in net losses to $2.4 billion last year.
Overseas Programs
Despite weakening global demand for electric vehicles and a price war, VinFast said its goal of selling 100,000 vehicles this year, which would be double its 2023 target, remained unchanged as it expands overseas.
The company sold fewer than 10,000 vehicles in the first quarter, but it attributed that to a generally slow start to the year for business, particularly in Vietnam.
By the end of June, VinFast plans to expand its car lineup to include right-hand-drive models for markets such as Thailand and Indonesia, it said, adding that results should be seen in the second half of this year.
The company also confirmed plans to build an assembly plant in Indonesia and India by 2026.
In Indonesia, “we expect to start deliveries of the VF e34 model soon and to launch the VF 5 model in the second quarter,” VinFast said, detailing plans for two economy cars that have so far not been announced.
VinFast, founded in 2017 and fully focused on electric vehicles since 2022, has yet to turn a profit, posting a net loss of $618 million in the first quarter. Revenue for the quarter nearly tripled from a year earlier, but fell 31% from the previous three months.
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