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VinFast, the Vietnamese Tesla, has delayed plans to build a factory in the US and significantly reduced its delivery target for this year.

AInvestMonday, Jul 15, 2024 12:50 am ET
1min read

VinFast, the Vietnamese electric vehicle maker, said in a statement on Saturday that it would delay the opening of its planned $4bn factory in North Carolina, US, to 2028, and cut its delivery target for this year to 80,000 from the 100,000 originally planned.

The company sold about 120,000 vehicles in the second quarter, up 24 per cent from the first quarter, and 21,747 in the first half, up 92 per cent year on year but only a quarter of the full-year forecast.

“While the second quarter delivery results were encouraging, the ongoing economic headwinds and uncertainties in the global EV landscape make the outlook for the rest of the year more cautious,” the company said.

Despite the diversification of its product portfolio and expansion into key markets (including new markets in Asia and existing markets), the company still expects strong growth in the second half of the year.

VinFast said it would delay the opening of its planned factory in North Carolina to 2028.

VinFast announced in 2022 that it would build a $1.5bn electric vehicle and battery factory in the US. However, the demand for electric vehicles has slowed as borrowing costs have risen and buyers have turned to cheaper hybrid vehicles, forcing many carmakers to reassess their new factory and new model plans.

VinFast said: “This decision will allow the company to optimise capital allocation, manage short-term expenses more effectively and focus more resources on supporting near-term growth targets and strengthening existing businesses. This adjustment will not change VinFast’s fundamental growth strategy and key operational targets.”

VinFast has yet to turn a profit and reported a net loss of $618m in the first quarter, with revenues up nearly two-fold from the same period last year but down 31 per cent from the previous three months.

The company will report second-quarter results on August 15.

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