VinFast Faces Further Delays for $4 Billion North Carolina Factory

A person briefed on the matter said Vietnamese electric car maker VinFast is considering further delaying a planned $4 billion factory in North Carolina as the loss-making company struggles to gain favor with U.S. consumers.

VinFast 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.

Timeline Adjustments:

The company had initially planned to complete the factory in July 2024 but later pushed back the start of operations to 2025. The source said it is considering another delay and asking to remain unidentified because the matter was not public.

Official Statements and Local Response:

VinFast, which sold fewer than 1,000 cars in North America last year, told Reuters it was “conducting a thorough review and evaluation of all aspects of the construction process for our North Carolina factory.”

A spokesperson for North Carolina’s Chatham County, where ground for the factory was broken in July, said officials there were unaware of any delay in the project.

The spokesperson said VinFast had twice revised the size of the factory’s general assembly building. The latest revision was submitted in April and is still being reviewed by the county’s permits department.

Economic and Political Context:

When VinFast announced its plans for the North Carolina factory in March 2022, U.S. President Joe Biden said the plant would create more than 7,000 jobs. “It’s the latest example of my economic strategy at work,” he posted on Twitter at the time.

Republicans won North Carolina by a small margin in the 2020 presidential elections, and Biden’s campaign is spending heavily to win the state in the November presidential election.

In addition to low sales, VinFast has been sued in the U.S. for not paying rent on a showroom. It also faces two separate probes – one over an April crash in California when four people died in an accident involving a VinFast VF 8 car and one for allegedly violating ArcelorMittal patents for aluminum used in the VF 8.

Sales and Financial Performance:

VinFast sold fewer than 35,000 cars globally last year—the vast majority of that in its home market, despite having a factory in northern Vietnam with an annual production capacity of 300,000 cars.

Most of its cars sold domestically are also sold to related parties. Its net loss last year widened 15% to $2.4 billion.