Vietnamese manufacturer VinFast has for the second time decided to postpone construction of the assembly plant it wants to build in the U.S. After previously pushing back the timetable for opening the plant to 2025, the company now says the new plant won’t be ready until 2028.
The plant, which will require investments of $4 billion, is to be built in North Carolina.
The company also said it’s reducing its delivery forecast for this year by 20,000 units, due to fluctuations in the global electric vehicle market. The target is now 80,000 deliveries rather than 100,000.
With regard to the factory decision, it's hard not to make a link with what's happening on the political front in the United States. Clearly, were Donald Trump to return to the White House, VinFast would face much more challenging conditions. When the company announced its initial plan to invest in North Carolina in 2022, it was in the context of taking advantage of the Biden administration's pro-electrification efforts.
Current state of affairs
The company already sells the VF 8 SUV in Canada, while the VF 9 is quietly making its debut.
VinFast sales rose by 24 percent (to around 12,000 vehicles) in the second quarter of 2024 compared with the first three months of the year. In all, since January 1, the company has sold 21,747 vehicles, a gain of 92 percent over last year.
That’s an impressive number, but it’s actually below expectations. Halfway through 2024, VinFast is but a quarter of the way to its target of 80,000 sales for the year. Keep in mind as well that many of those sales are to companies belonging to the Vingroup empire, the parent company that oversees VinFast, which somewhat distorts the data concerning the general public's interest in the brand's products.
However, we can also choose to see the glass as half full.
“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 via a statement.
The EV maker still expects strong sales growth in the second half of 2024, thanks to a diversified product range and expansion within key regions, including new and existing markets in Asia.
VinFast points out that this postponement of plant construction does not alter its growth strategy or operating targets. The decision will enable it to better focus its current resources to support short-term growth and strengthen existing operations.