VinFast Delays US Electric Car Plant as Global EV Market Slows
VinFast delays the opening of its US$4 billion factory in North Carolina to 2028 due to uncertainties in the global EV market. The company revises its delivery forecast for this year, reducing it by 20,000 units. VinFast reports a 24% increase in sales during the second quarter but remains cautious about economic headwinds and uncertainties in the EV landscape.
The company, founded by Vietnam's richest man, Pham Nhat Vuong, in 2017, has pushed back the opening of the facility to 2028 due to uncertainties in the global electric vehicle (EV) market. Additionally, VinFast has revised its delivery forecast for this year, reducing it by 20,000 units.
Initially, VinFast had planned to deliver 100,000 vehicles in 2024. However, the company has now adjusted its target to 80,000 units. Despite a 24% increase in sales during the second quarter, with approximately 12,000 vehicles sold, VinFast remains cautious about the economic headwinds and uncertainties in the global EV landscape.
VinFast's sales performance in the first half of 2024 has been promising, with a 92% increase compared to the same period last year. However, the new yearly forecast represents only a quarter of the initial projection. In a statement, VinFast acknowledged the need for a more prudent outlook for the rest of the year, given the prevailing market conditions.
The company remains optimistic about the second half of the year, anticipating strong sales growth driven by a diverse product range and expansion into new markets in Asia, as well as existing markets. VinFast aims to capitalise on its presence in key regions to boost sales and maintain its growth trajectory.
The delay in the launch of the North Carolina factory, originally planned for 2025, is a strategic decision by VinFast. The company aims to optimise its capital allocation and manage short-term spending more effectively. By shifting the timeline to 2028, VinFast can focus on supporting near-term growth targets and strengthening its existing operations.
VinFast's decision to establish a factory in the United States was driven by the Biden administration's efforts to incentivise EV production within the country. However, the demand for EVs has faced challenges, including high borrowing costs and increased interest in cheaper gasoline-electric hybrids. As a result, many automakers, including VinFast, have had to reassess their plans for new factories and models.
Despite the delay and revised delivery forecast, VinFast emphasises that its fundamental growth strategy and key operating targets remain unchanged. The company is committed to its long-term vision of becoming a major player in the global EV market.
VinFast, which has yet to turn a profit, reported a net loss of US$618 million in the first quarter. Although revenue nearly tripled compared to the previous year, it experienced a 31% decline from the previous quarter. The company is scheduled to announce its second-quarter results on August 15.
VinFast delays the opening of its $4 billion factory in North Carolina to 2028 due to uncertainties in the global EV market.
The company revises its delivery forecast for this year, reducing it by 20,000 units.
VinFast reports a 24% increase in sales during the second quarter but remains cautious about economic headwinds and uncertainties in the EV landscape.
Source: REUTERS