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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.
Adjusted Delivery Targets:
VinFast, founded by Vietnam’s richest man, Pham Nhat Vuong, in 2017 and transitioning to fully electric vehicles in 2022, now expects to deliver 80,000 vehicles this year, down from the initially planned 100,000.
The Vietnamese EV maker sales rose 24% to about 12,000 vehicles in the second quarter compared to the previous three-month period. VinFast sold 21,747 units in the first half of 2024, marking a 92% increase from the same period last year, yet still about one-fourth of the revised yearly forecast.
Economic Challenges and Market Conditions:
“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.
VinFast still anticipates strong sales growth in the year’s second half, driven by a diverse product range and expansion into key regions, including new markets in Asia and strengthening existing markets.
In its statement, VinFast confirmed the delay of its planned factory in North Carolina to 2028 from the initial target of 2025. Reuters had previously reported a possible delay in May.
Background on U.S. Expansion Plans:
VinFast announced in 2022 plans to build an EV and battery factory in the United States with an annual production capacity of 150,000 vehicles, aiming to benefit from the Biden administration’s subsidies for EVs made in America.
However, demand for EVs has faltered due to high borrowing costs and a shift in consumer preference towards 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 said.
VinFast emphasized that the adjustment does not alter its fundamental growth strategy and key operating targets.
Financial Performance Overview:
VinFast, which has yet to profit, reported a net loss of $618 million in the first quarter. While revenue nearly tripled year-over-year, it fell 31% from the previous three months.
The company is set to announce its second-quarter results on August 15.
