With its all-electric SUV winning harsh criticism and low demand, Vietnamese automaker VinFast appears to be rethinking its commitment to set up a $4 billion U.S. assembly complex. There’s growing concern the North Carolina facility will be delayed, even cancelled.
The VinFast VF 8 got off to a slow start amidst harshly critical reviews.
Barely 10 months after breaking ground for a new manufacturing complex in North Carolina, Vietnamese auto start-up VinFast appears to be having second thoughts.
VinFast has already reached out to local officials to get permission to downsize the factory, which originally was scheduled to have the capacity to produce 150,000 EVs annually. Several sources who spoke to Headlight.News, as well as a report by Reuters, indicate that VinFast is now considering whether to delay construction and possibly kill the project entirely.
Such a move would come at a time when sales growth in the EV market has slowed sharply. But the Vietnamese manufacturer wouldn’t be the only one to delay work on some of its planned EV operations. Rivian, for one, has put a planned factory in Georgia on indefinite hold.
VinFast off to a slow start
VinFast is experiencing multiple delays in getting key products to launch on time
Things haven’t gotten off to a good start for the EV manufacturer. Sales were expected to begin in December 2022 but were delayed until March of the following year. All told, the automaker sold only 3,129 vehicles in North American in 2023, well short of its target. For the first four months of this year it moved about 1,500, noted Sam Abuelsamid, senior auto analyst for Guidehouse Insights, reflecting only the slightest monthly increase.
It didn’t help that the original Vinfast VF 8 received harsher critical reviews filing the brand’s first U.S. media drive last year. Complicating matters, plans to bring an assortment of additional products to the U.S., including the larger, more luxurious VF 9, as well as smaller products like the all-electric VF 6 and 7, have failed to materialize. It now says it will begin expanding the line-up in June.
“The product they have now “is not particularly competitive,” said Abuelsamid, adding that it’s going to be tough for them to make a go of that.”
Downsizing plans
VinFast’s downsizing plans come after the company initially made a strong push for expansion
In a statement first published by Reuters, VinFast said it is “conducting a thorough review and evaluation of all aspects of the construction process for our North Carolina factory.”
An official with the Chatham Country government indicated that VinFast has already twice sought to revise plans for the U.S. factory. The latest request, submitted in April, is still undergoing the county’s review, according to Reuters.
Revising the factory project wouldn’t be entirely out of the norm for the Vietnamese automaker which was founded in 2017 and began producing licensed versions of the BMW X5 two years later. It announced plans at the November 2021 Los Angeles Auto Show to switch to an all-electric product portfolio.
“The DNA of VinFast is to learn” and then address its problems, the then-global CEO Le Thi Thu Thuy said at the July 2023 factory groundbreaking. She acknowledged that “The last few months have been challenging,” but insisted that “ everything is falling into place and we have a clean vision” of where the company wants to go.
More VinFast News
- VinFast Introduces New Concept Pickup truck and Micro-SUV at CES
- Shakeup at Troubled VinFast: Vietnamese Automaker Names New CEO, CFO
- VinFast Making Moves to Expand in U.S.
Delay or cancellation?
VinFast’s troubles might affect key vehicle programs like the production version of the VF Wild pickup
While VinFast continues to signal that the plant project may move ahead, albeit in downsized form, there is growing skepticism among industry observers – backed by comments made by sources close to the company.
“I’m not surprised that they would delay or even cancel a factory that size when you’re not selling vehicles,” said analyst Abuelsamid. Several others familiar with the company said, on background, that they were also growing skeptical the plant will ever be completed.
VinFast isn’t alone
VinFast’s new dawn might not be as simple to achieve as the company hoped
If VinFast does significantly change its strategy it would be far from the only automaker adjusting plans to respond to slowing EV sales growth.
Ford, for one, is stretching out $11 billion in investments, indefinitely delaying construction of one of two battery plants in Kentucky, while downsizing another in Michigan. It’s pushing back the launch of its Blue Oval Manufacturing Complex in Tennessee, as well. General Motors, meanwhile, is delaying by more than a year the reopening of an EV assembly plant in the northern Detroit suburbs.
There have been reports that Tesla is rethinking its own plan to expand its manufacturing footprint. Meanwhile, Rivian earlier this year put the construction of a second assembly plant in Georgia on indefinite hold. It is, for now at least, consolidating production at its original plant in Normal, Illinois.
Could the Chahamcounty pursuits Vinfast for cancelling the project? It was written in the sky that VF doesn’t have money to complete the project with more than 6 billions of debt and counting. VF doesn’t confirm the number of cars they sold until now in US and Canada while the number of cars sold in Vietnam are not confirmed by any serious source…
Not having access to the documents agreed to by the county and VinFast I can only guess at potential penalties. They’re often caveats covering incentives provided by the government. We’ll have to see, especially as the project has not yet been cancelled.
Paul E.