In a recent development, Vietnamese electric vehicle (EV) manufacturer VinFast Auto Ltd. VFS has announced a three-year delay in the construction of its US factory, further complicating its global expansion plans.
What Happened: VinFast has also scaled down its annual sales target from 100,000 to 80,000 units, Bloomberg reported on Monday. The postponement of the North Carolina factory, declared on Saturday, is likely to exert additional strain on the company’s sales forecast.
Tyler Manh Dung Nguyen, Chief Market Strategist at Ho Chi Minh City Securities Corp., characterized the U.S. market as “tough” for VinFast, particularly in light of the ongoing consumer transition from full EVs to hybrid vehicles. He further stated that the absence of a U.S. manufacturing facility could present additional obstacles for VinFast in the face of stiff competition in the EV sector.
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The U.S. auto market has been a challenging terrain for several automakers, including EV startups. Despite VinFast’s optimism in achieving its sales target, Ken Foong, a Bloomberg Intelligence analyst, cautioned that the company’s 2024 outlook might be subject to further downgrades, given that its sales target for the second half of 2024 suggests a 168% surge from the first half of the year.
Earlier, VinFast’s debut EVs in North America were met with negative feedback due to software and other issues, resulting in a recall of all 999 VF8 SUVs shipped to the US. Despite these setbacks, the company remains unfazed and plans to concentrate on “a more selective group of potential markets” and expand into Indonesia, India, and the Philippines.
Why It Matters: Previously, VinFast had shown confidence in the U.S. EV market due to the higher demand for EVs and supportive regulations. The company had planned to start operations in its North Carolina factory in 2025, which was expected to produce up to 150,000 vehicles a year in its first phase.
Additionally, VinFast was reportedly seeking a $250 million bank loan to finance the construction of a new assembly plant in Subang, Indonesia, highlighting its ambitions to expand its regional footprint and compete in the global EV market.
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Image: Shutterstock/ betto rodrigues
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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