Vietnam's VinFast delays US electric car plant amid market slowdown

[July 13, 2024]  By Phuong Nguyen

HANOI (Reuters) - Vietnamese electric vehicle (EV) maker VinFast is delaying the launch of its planned $4 billion factory in North Carolina to 2028 and cutting its delivery forecast for this year by 20,000 units amid uncertainties in the global EV market.

VinFast, founded by Vietnam's richest man Pham Nhat Vuong in 2017 and which turned to making fully electric vehicles in 2022, said it would now deliver 80,000 vehicles this year, down from the initially planned 100,000.

Sales at the Vietnamese EV maker rose 24% to about 12,000 vehicles in the second quarter, compared with the previous three-month period. In total, VinFast sold 21,747 units in the first half of 2024, an increase of 92% against the same period last year, but around one-fourth of the new yearly 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 said in a statement on Saturday.

The EV maker still expects strong sales growth in the second half of the year, driven by a diverse product range and expansion in key regions, including new markets in Asia and existing markets.

In its statement, VinFast said it would delay the launch of its planned factory in North Carolina to 2028 from the current plan of 2025. Reuters had reported a possible delay in May, citing a person briefed on the matter.

VinFast had 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 logo of Vietnam's VinFast, a fledgling electric vehicle (EV) maker, is pictured in a sales location at a shopping mall in Santa Monica, California, U.S., May 23, 2022. Picture taken May 23, 2022. REUTERS/David Swanson/File Photo

However, demand for EVs has faltered amid high borrowing costs and as buyers turn to cheaper gasoline-electric hybrids, forcing 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 said.

"The adjustment doesn't change VinFast's fundamental growth strategy and key operating targets."

VinFast, which has yet to make a profit, logged a net loss of $618 million in the first quarter. Revenue for the period nearly tripled from a year earlier but tumbled 31% from the previous three months.

The company is set to announce its second-quarter results on Aug. 15.

(Reporting by Phuong Nguyen; Editing by David Holmes)

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