Vietnam's VinFast delays US electric car plant amid market slowdown
Vietnamese EV manufacturer VinFast delays the launch of its $4 billion North Carolina factory to 2028 and cuts its 2024 delivery forecast by 20,000 units due to global market uncertainties.
Vietnamese electric vehicle (EV) manufacturer VinFast has postponed the launch of its planned $4 billion factory in North Carolina to 2028 and reduced its delivery forecast for this year by 20,000 units due to uncertainties in the global EV market. VinFast, established in 2017 by Vietnam's wealthiest individual, Pham Nhat Vuong, began producing fully electric vehicles in 2022. The company now plans to deliver 80,000 vehicles this year, down from the initial target of 100,000.
In the second quarter, VinFast's sales increased by 24%, reaching about 12,000 vehicles compared to the previous quarter. Overall, the company sold 21,747 units in the first half of 2024, a 92% increase from the same period last year, but this figure represents only about a quarter of the revised annual forecast.
"While the second-quarter delivery results were encouraging, ongoing economic headwinds and uncertainties in different macro-economies and the global EV landscape necessitate a more prudent outlook for the rest of the year," VinFast stated on Saturday. Despite the challenges, the company anticipates strong sales growth in the second half of the year, driven by a diverse product range and expansion into new markets in Asia and existing markets. VinFast confirmed the delay of its North Carolina factory launch to 2028, shifting from the previously planned 2025. This delay was initially reported by Reuters in May.
In 2022, VinFast announced plans to build an EV and battery factory in the United States with an annual production capacity of 150,000 vehicles, aiming to leverage the Biden administration's efforts to approve subsidies for American-made EVs. However, demand for EVs has declined due to high borrowing costs and a shift by buyers to cheaper gasoline-electric hybrids, prompting many automakers to reassess their plans for new factories and models.
"This decision will allow the company to optimize its capital allocation and manage its short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations," VinFast explained.
"The adjustment doesn't change VinFast's fundamental growth strategy and key operating targets."
Despite not yet turning a profit, VinFast recorded a net loss of $618 million in the first quarter. Revenue for the period nearly tripled from a year earlier but dropped by 31% from the previous quarter. The company is scheduled to announce its second-quarter results on August 15.
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