VinFast Auto Ltd. said it will delay the opening of its electric vehicle factory in North Carolina by three years to 2028, adding to the Vietnamese company’s challenges of becoming a global brand.
The decision will allow it to manage short-term spending “more effectively” and focus resources on near-term growth targets, the automaker said in a statement. It also lowered its full-year sales target to 80,000 units from 100,000 previously.
“We have adopted a more prudent outlook that is carefully calibrated to near-term headwinds, taking into full consideration the realities of market volatility and potential challenges,” VinFast Chairwoman Le Thi Thu Thuy said in the statement.
Delaying the North Carolina plant underscores the difficulties the little-known EV maker faces as it tries to crack the global EV market whose outlook has deteriorated in the past year.
In its annual Electric Vehicle Outlook, BloombergNEF reduced its battery-electric sales projections by 6.7 million vehicles through 2026. Several of the world’s largest manufacturers including Ford Motor Co., General Motors Co., Volkswagen AG and even Tesla Inc. have dialed back ambitions in recent months.
And after a spectacular US market debut in August, when VinFast’s stock soared more than 700% in just two weeks, shares of the unprofitable company have plunged more than 90% from their peak.
VinFast will focus on “near-term opportunities in a more selective group of potential markets, allowing for optimal capital and resource management, and minimizing risks more effectively,” it said.
The factory timeline change comes weeks after VinFast’s billionaire founder and Chief Executive Officer Pham Nhat Vuong said in an interview with Bloomberg TV that he was willing to bet all his money on the company’s growth.
Vuong said then that VinFast was weighing rising factory cost concerns against risks a delay would hamper the ability to tap into growing American consumer demand for EVs. There were no plans to reduce the factory’s initial annual production capacity of 150,000 vehicles or scale down its footprint, he added in the interview.
VinFast, in its statement, did not say whether the North Carolina factory’s planned size or production capabilities would change.
VinFast currently exports made-in-Vietnam vehicles to the US, which accounted for more than 10% of its deliveries in the first quarter of this year.
Even while cutting its full-year sales target, VinFast said it expects stronger sales growth in the second half of 2024 as it expands its global distribution network in Asia and with dealerships in the US and other existing markets.
Vuong, in the interview, also said VinFast targets sales from the US market to increase by 30-40 fold this year after having revenue of just $6.4 million in that market in 2023.
The automaker delivered 12,058 electric vehicles in the second quarter, increasing 24% from the previous quarter and 26% versus the same period last year, it said in the statement. In the first half, it delivered 21,747 cars, up 92% over the same period last year.
The company sold 34,855 vehicles in 2023, and most of its sales have been to related parties.
